Barclays "Glitch" Caused Tuesday's Market Freakout

Tyler Durden's picture

Barclays just can't catch a break these days: after creating the biggest "bad bank" 5 years into the laughably called "recovery", the latest batch of terrible earnings and the announcement of some 19,000 pink slips to be handed out shortly as the British bank has now lost all benefits from being presented the only valuable Lehman assets on a Blue light special platter 5 years ago, it now appears that the desperate and flailing bank also has placed monkeys in charge of trading because as Bloomberg reports it was also responsible for the freakout that hit a vast number of stocks at 3:49:00 pm on Tuesday and which we profiled in "Is There Anything Wrong With These Charts?" It appears the answer was "yes."

From Bloomberg:

A trading error at Barclays Plc this week caused split-second swings in dozens of U.S. stocks including AOL Inc. and Caterpillar Inc., according to people familiar with the matter.

 

Barclays moved the prices of some shares on May 13 after orders tied to the close of trading were incorrectly entered, causing the transactions to be executed immediately, the people said. Barclays clients weren’t affected financially by the error, according to one person, who asked to not be identified because the details haven’t been made public.

 

Kerrie Cohen, a spokeswoman for London-based Barclays, declined to comment.

 

The mistake whipsawed companies such as AOL, Caterpillar, Nabors Industries Ltd. and Nasdaq OMX Group Inc. According to Winnetka, Illinois-based Nanex LLC, which tracks trading disruptions, at least 28 stocks were affected, with AOL moving the most: a decline of 11 percent. Within a second, prices largely returned to where they’d been before the error.

And this is what happens when in a market as broken as this, one uses market orders - everything breaks. For those who have forgotten it, here is the snapshot highlighting the freakout that took place amid numerous unrelated stocks at exactly the same time:


1. AOL.



2. CNQ.



3. LO.



4. NBR.


 

The only good news: at least this latest confirmation of just how fragile this rigged and broken market is, wasn't blamed on a "glitch." Oh wait, nevermind.

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AccreditedEYE's picture

Mr. Valentine has set the price...

NotApplicable's picture

"Testing... 1... 2... Testing..."

SWCroaker's picture

This new red/green stock DIY HFT package is just the bomb, boss!   We're gonna be on easy street in a week!

knukles's picture

Commercial banks can fuck anything up.  Anything.

Arius's picture

Cant do things on the cheap ... if they are going to fire people on mass, such "glitches" are to be expected ... it could be a domestic terrorist if you know what i mean ...

Pool Shark's picture

 

 

Of course they're using monkeys!

Monkeys have no collective bargaining skills and lower healthcare costs.

Duh...

 

Arius's picture

Cant do things on the cheap ... if they are going to fire people on mass, such "glitches" are to be expected ... it could be a domestic terrorist if you know what i mean ...

Say What Again's picture

I've been trading for a long time now, and I've had my share of "mistakes" when entering an order.  I've tried to call the trading desk and begged to have the order reversed.  You can imagine the laughter on the other end of the phone.

These mistakes have made me be very careful when I touch the keyboard or click the mouse.  But these large banks get a do-over when they mess up.

If they had to eat all the losses from their algos-gone-wild, I think things would be different.

eatthebanksters's picture

HFT...totally legit...nothing wrong with starting the day ownng nothing and ending the day owning nothing yet making a vig off everyone else's trades.  Isn't that what bookies do?  Don't you go to jail for being a bookie? WTF....I think the guvmnt wants HFT becasue it drives ridiculous volume and 'boosts' the market.  If HFT went away would QE be enough?  What a fucked up deal...

Dr. Engali's picture

Damn rogue traders are everywhere.

Cathartes Aura's picture

nationstates, currencies, corporations, stocks, banks. . .

all fictions created to pump up,

then dump

when the timing is ripe.

*poof*   gone.

assistedliving's picture

Barclays...the gift that keeps on giving

and GS, Citi, JPM, HSBC, DB, CS, RBS, etc etc etc see a trend here?

medium giraffe's picture

Yep, another fine example of systemic fragility.  A balls up by one small department in a single institution impacts a disproportionatly large number of companies across major indicies.

Now what do you think is going to happen if the derivatives market implodes?

Feeling lucky?

riot-police's picture

"Barclays clients weren’t affected financially by the error, according to one person,"

 

Yea right-- This is exactly how traders get screwed.

 

Stops are hit.

 

Which should not be hit, except for some catastrophe, not on a regular basis.

medium giraffe's picture

You just have to adapt to conditions and widen your stops by a couple of thousand points.  It might make your R:R a little lopsided, but no biggie, it's fine.

riot-police's picture

It must be real "handy" to be able to spike the price and have it return to the same level a milisecond later.

medium giraffe's picture

Certainly one way of generating liquidity.  Might be worth setting some entry orders out beyond a std dev or two.  You never know, you might get lucky one day and be able to buy a few Greek islands, found your own country and set up your own Central Bank. 

If you ever come across an emerging nation called 'Giraffistan', you'll know what's happened.

Bold Eagle's picture

So Barclays is also on the stock fixing committee?

earnyermoney's picture

Lots of empty seats in nexy years Barclay's Premier League fixtures.

Squid Viscous's picture

Attention: the casino is closed... you may redeem your remaining chips for a shit sandwich in the lobby

timmeh's picture

nothing to see here...

ebworthen's picture

Disgruntled employee?