This page has been archived and commenting is disabled.

The Retail Trader Lockout - Today's 'Market' "Issues" Were Worse Than The Flash Crash

Tyler Durden's picture




 

For 39 minutes today, as we noted earlier, the US stock "market" broke. As Nanex details, a total of 1,384 symbols were affected as 100s of stocks trade with crossed NBBOs, practically eliminating any chance for retail traders to transact. Options market were frantic, volatility swung around like a Ukrainian border-patrol agent, and yet the US equity indices limped ever higher. For those who fear 'the big one', for those who understand market liquidity, for those who got a glimpse of what happens when large crowds meet small doors in the high-yield credit market, today's "broken" market was a cold hard lesson that few 'moms and pops' would have noticed... but from the perspective of 'ability to trade' - today's market was worse than the Nasdaq Blackout and the Flash Crash... Hedge accordingly.

 

Via Nanex,

The Retail Lockout of 2014

Hundreds of symbols with crossed NBBOs

1. Count of symbols with a crossed NBBO each second.  Event started at 11:58:25 and ended at 12:37:27. Over symbols were affected during several seconds of time. A total of 1,384 symbols were affected.



2. Final impact at the end of the day: higher count of instances of symbols with a crossed NBBO each second than Nasdaq blackout or Flash Crash!



3. BITA - trades color coded by reporting exchange and NBBO (red indicates where it was crossed).



4. Showing Retail trades - note how these trades only occur when the NBBO is not locked (dark gray). In other words, a crossed NBBO shuts down retail order matching.



5. Retail selling - gets the worst prices when the NBBO returns to normal.



6. Retail buying.


 

*  *  *

But apart from that... and the year's lowest trading volume... stocks are at all-time highs so that must be good right... until someone decides to sell that is... to lock in that 'wealth effect'... now we leave it to the game theorists to decide, is first mover advantage net positive now so close to the end of QE?

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 08/26/2014 - 21:11 | 5147369 Cognitive Dissonance
Cognitive Dissonance's picture

This is getting uglier and uglier. It staggers the mind to consider how much further down the rabbit hole this might go before.....well, before......

Tue, 08/26/2014 - 21:13 | 5147380 Grande Tetons
Grande Tetons's picture

At the bottom of the rabbit hole one will find a gigantic heap of cans. 

Tue, 08/26/2014 - 21:15 | 5147391 QEternity
QEternity's picture

There's a dark at the end of the tunnel and its coming right for us

Tue, 08/26/2014 - 21:22 | 5147414 linniepar
linniepar's picture

<---  buy phyz now with SD IRA

<--- ride miners up, catch real estate on way down

Tue, 08/26/2014 - 21:54 | 5147519 BeetleBailey
BeetleBailey's picture

<---buy phyz now/stock/pack/load

<---hunker down and squanker over

Wed, 08/27/2014 - 00:51 | 5148026 A Nanny Moose
A Nanny Moose's picture

So my 401K administrator tells me I cannot withdraw from my 401K except in retirement, or hardship cases. Whose moeny is it? Why am I contributing to a 401K still? Where is my cheese?

Wed, 08/27/2014 - 03:38 | 5148209 WOAR
WOAR's picture

Why do you pay insurance when you never get to use it?

Follow the flow of money...right out of your pocket!

Wed, 08/27/2014 - 07:53 | 5148401 spinone
spinone's picture

sure you can, just take a 30% penalty.  If you think the market will go down by more than 30% its a good idea.

Tue, 08/26/2014 - 22:56 | 5147732 Lets Buy The Dip
Lets Buy The Dip's picture

As the third quarter gets underway, we stick to our expectation for three percent growth and with it, higher equity prices I would rather listen to people that get it right all the time, and analysts who are accurate. Like these guys => bit.ly/1fMcakI

Is it ME or do the comments in ZEROHEDGE each day seem like the world is about to explode, and the market crash to 0 zero?

Wed, 08/27/2014 - 07:21 | 5148358 armageddon addahere
armageddon addahere's picture

This has been true every day for the last 5 years and every day they have been wrong.

Wed, 08/27/2014 - 09:32 | 5148744 PT
PT's picture

It's true.  ZH will have you convinced that the world will end tomorrow, or in five minutes time.  And then it doesn't.  But all the facts that lead to the conclusion are still there!!!!!!!!!  All the problems are still there.  All the maths is still there.

When the empirical data has zero correlation to the equation, you are using the wrong equation.
If the maths doesn't work then the real maths is hidden.  In this case, I think we're beyond maths and up to people analysis.  The numbers will be bent any which way to keep certain people happy.  Find the right people and you can find the truth about what the numbers will do.  Remove the right people from the equation (whether through natural or artificial means) and the predicted Chaos from the visible maths will re-enter the Realm.

Wed, 08/27/2014 - 09:34 | 5148752 PT
PT's picture

Random walk.  You know the drunk is going to fall off the cliff but you have no idea when.  And he may reach the edge many times and then turn back before the eventual toppling.

Wed, 08/27/2014 - 00:22 | 5147876 BringOnTheAsteroid
BringOnTheAsteroid's picture

Excuse me, they are called African Americans. And while we are on the topic of racism, Jews are now to be referred to as Goyim Challenged.

Wed, 08/27/2014 - 01:02 | 5148045 free_as_in_beer
free_as_in_beer's picture

foreskin challenged

Wed, 08/27/2014 - 03:17 | 5148196 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

Heheh. My favorite variations of that cynical line would probably be:

 

"Due to technical difficulties the light at the end of the tunnel is out of order."

and

"The light at the end of the tunnel is the express train coming at us."

Tue, 08/26/2014 - 21:16 | 5147395 flacon
flacon's picture

Yes we "can".

Wed, 08/27/2014 - 06:40 | 5148309 FinalEvent
FinalEvent's picture

wow, priceless!

Tue, 08/26/2014 - 21:19 | 5147399 max2205
max2205's picture

What symbols?

Tue, 08/26/2014 - 21:15 | 5147383 knukles
knukles's picture

Which rabbit hole?

Tue, 08/26/2014 - 21:17 | 5147396 Cognitive Dissonance
Cognitive Dissonance's picture

One that soon enough will grow so large it will swallow Wall Street and the NY Fed. Then (of course) the 'taxpayer' will once again ride to the rescue because.....well, because the Fed is the Fed.

<The Fed is dead. Long live the Fed.>

Tue, 08/26/2014 - 21:31 | 5147443 kill switch
kill switch's picture

the 'taxpayer' will once again ride to the rescue because.....

CD,

 

The taxpayer game of bailout is over...the taxpayer's pockets are fucking empty so I guess it's fuck the FED time....Or about time...

 

 

Tue, 08/26/2014 - 22:02 | 5147545 dracos_ghost
dracos_ghost's picture

I'd like to think you're right but since pensions are the bag holders of last record, the PBGC is idling to bailout the inevitable collapse. Gonna make TARP look like a clam bake. All courtesy of the US taxpayer - empty pockets or not. Absolute seizure of everything is on the table.

Tue, 08/26/2014 - 22:28 | 5147610 kill switch
kill switch's picture

dracos_ghost,

 

 

Your right they'll stop at nothing...Status subnormal  

Not trying to rub it in but I did the lump sum trick....>>>PM's

 

Good thing as Peter Schiff lost me $750,000.00 NEVER LET ANYONE MANAGE YOUR FIAT...I'm still healed but at the time it hurt....

Tue, 08/26/2014 - 23:15 | 5147709 barliman
barliman's picture

 

PM's are headed WAY down before they are headed way up ... and even then the valuations will primarily be in fiat.

@CD - the FED is dead; they just haven't buried the body yet. There is only ONE way for the current "markets" to play out ...

They no longer worry about the retail trade. They no longer worry about the directions given by the 0.01%. I know at least 6 of the old timers here were involved in a long discussion back before 99% of the folks currently on ZH even knew it existed where the topic of "What happens when the people who CONTROL the markets decide to do whatever the fuck they want with EVERYBODY'S money?".

It's why the big names were backing IEX.com - they needed the insider information. And even then, the "rash of suicides" didn't deter the men behind the curtains.

If you want to "see" how the story ends? Buy an old vehicle. Empty all but 1 quart of oil from the engine. Turn vehicle on and place a concrete block on the gas pedal. Stand back and wait for "end market simulation" to complete.

Any questions?

Wed, 08/27/2014 - 05:36 | 5148266 hairInTheSoup
hairInTheSoup's picture

"Absolute seizure of everything is on the table."

which is the agenda from the beginning, make no mistake & noone shall get confuse about it, it's the agenda of fiat currency, it's not an accident or the unexpected failure of the system, it's the plan all along; their great bankster cycle.

Wed, 08/27/2014 - 07:56 | 5148404 spinone
spinone's picture

when you invest, you give your money to corporations and banks.  don't be suprised if they dont want to give it back.

Tue, 08/26/2014 - 22:41 | 5147671 stocktivity
stocktivity's picture

As long as they can print money out of thin air, it's not close to being over. Until then ...It's all Bullshit!!!!

Tue, 08/26/2014 - 21:15 | 5147388 himaroid
himaroid's picture

Brer Rabbit discovers the Tar Baby and Brer Fox are in there with nary a briar patch in sight.

Tue, 08/26/2014 - 21:11 | 5147371 Seasmoke
Seasmoke's picture

I am all in, on Gold. There is no more hedging for me. 

Tue, 08/26/2014 - 21:27 | 5147429 Spitzer
Spitzer's picture

Gold was up $25 on the day of the flash crash.

 

Wed, 08/27/2014 - 06:43 | 5148314 FinalEvent
FinalEvent's picture

Nope, it remained at the bottom of the lake where I had that accident.

Tue, 08/26/2014 - 21:37 | 5147453 Ewtman
Ewtman's picture

If you put any stock into Elliott Wave theory, buying gold at these levels is still not a good idea...

 

http://www.globaldeflationnews.com/gold-elliott-wave-update-for-july-201...

 

 

Tue, 08/26/2014 - 22:25 | 5147569 JuliaS
JuliaS's picture

I like how the Elliott Wave exists in a complete vacuum. No geopolitical risks in gold, no QE, no contracts manipulation. Simply a buch of lines juping up and down, deflecting off imaginary borders and cycling like a tune. Nice little world where no commodity exists but the one thing being traded. Always right in hindsight. Just keep zooming in and out of the chart until the pattern looks right. The beauty of technical analysis!

Tue, 08/26/2014 - 22:44 | 5147690 WillyGroper
WillyGroper's picture

merit gold?

Wed, 08/27/2014 - 05:58 | 5148274 negative rates
negative rates's picture

Suface merit gold.

Wed, 08/27/2014 - 01:52 | 5148127 hedgiex
hedgiex's picture

YES. Just skim the volatilies across spaces (market segments) like switching channels of yr TVs and ignore the porn streams from the economists/market pundits. Risk/Liquidity/Returns are all encapsulated in the flashing digits and you dance with their momentum. That's Trading.

Wed, 08/27/2014 - 08:50 | 5148571 StandardDeviant
StandardDeviant's picture

Whenever I hear "Elliott Wave" I think of epicycles, and of Karl Popper's falsifiability.

Wed, 08/27/2014 - 00:23 | 5147976 F0ster
F0ster's picture

I'm all in on Gold too. It's finally time to get out of paper completely.

Wed, 08/27/2014 - 01:07 | 5148057 Fijiaaron
Fijiaaron's picture

You know the Leaden Rule, right?
He who has the lead gets the gold.

Wed, 08/27/2014 - 03:42 | 5148212 WOAR
WOAR's picture

It takes balls to use lead.

Some people have gone short on balls, though...

Wed, 08/27/2014 - 05:57 | 5148273 negative rates
negative rates's picture

Like I said, you show me the money, and i'll show you the gold.

Tue, 08/26/2014 - 21:13 | 5147379 youngman
youngman's picture

when it does tank..you can bet the Retail trader will be locked out...

Tue, 08/26/2014 - 21:14 | 5147384 Grande Tetons
Grande Tetons's picture

So...no point shorting. No sarc. Do not short. Do not short. Do no short. Makes for a nice neck tattoo. 

Tue, 08/26/2014 - 21:15 | 5147387 Cognitive Dissonance
Cognitive Dissonance's picture

Only if s/he wants to sell. Buying is always welcome.

Wed, 08/27/2014 - 06:00 | 5148275 negative rates
negative rates's picture

Locked up, stiffer than a board.

Tue, 08/26/2014 - 21:21 | 5147410 FieldingMellish
FieldingMellish's picture

Its like a satellite re-entering the atmosphere. A shake, a judder, a panel here, an antenna there, then.... BOOM!

Tue, 08/26/2014 - 21:23 | 5147417 Atomizer
Atomizer's picture

I just looked at the charts, what side of this retail bloke was playing? I need to know this before commenting. 

His entire portfolio could of hinged ass backwards. Let's really see the risks taken and validate manipulation vs retard retail investor. 

Just need to be fair before launching information already collected. 

Tue, 08/26/2014 - 21:31 | 5147439 Pumpkin
Pumpkin's picture

I did a detailedl research of the markets in 2008-2009, to begin serious investing.  I discovered that the markets are rigged.  Anyone who investes in this market without an unfair advantage, as in part of 'the rigged' is a fool.  The casino is at least honest about their advantage.  Land, gold and silver (guns and ammo a given) only.  With the land it is required that you study law for 6 years or so, to figure what to do about property taxation.

Tue, 08/26/2014 - 21:38 | 5147457 fuu
fuu's picture

The holographic market.

Tue, 08/26/2014 - 21:45 | 5147488 Atomizer
Atomizer's picture

Sounds like another round of CDS and short stock bans form 2008.

These incompetent fuckwits are making sure the historians sell the story. What the story, Tranny -in - Chief will be able to bond with his Kenyan brothers. Working for a company scamming for slave labor and swipping credit cards to build a health care empire. Watch and laugh

 

Boomerang Kids: Welcome Home, Get a Job - Episode.

http://m.youtube.com/watch?v=c2LeY3B4YA4

 

 

 

 

Tue, 08/26/2014 - 21:50 | 5147505 Osmium
Osmium's picture

I need a little help here.  How do electronic markets get crossed?  Shouldn't the trades still execute at the best bid?

Tue, 08/26/2014 - 22:04 | 5147554 Seize Mars
Seize Mars's picture

Osmium

There are several markets to execute a given NASDAQ stock on. It's possible for them to not be on the same page.

Tue, 08/26/2014 - 22:56 | 5147733 barliman
barliman's picture

 

You didn't read "Flash Boys". Go read "Flash Boys".

That is the shortest, quickest way for you to get your answer,

Tue, 08/26/2014 - 23:05 | 5147761 barliman
barliman's picture

 

If you don't know the answer AFTER you read "Flash Boys" ... stick a fork in yourself, you're done.

Tue, 08/26/2014 - 21:58 | 5147531 Seize Mars
Seize Mars's picture

Anyone still trading is an idiot.

Tue, 08/26/2014 - 22:11 | 5147578 JuliaS
JuliaS's picture

Yellen does look like an idiot.

Wed, 08/27/2014 - 05:41 | 5148267 hairInTheSoup
hairInTheSoup's picture

she's a good actress.

(stop listen to what they say & look at what they do)

Tue, 08/26/2014 - 22:44 | 5147683 dot_bust
dot_bust's picture

"You have to trade in the stock market so that you can find out what is in it, away from the fog of the controversy."

-- Nancy Pelosi

Nancy says to ignore the broken, overpriced market and buy stocks anyway. Don't worry that she's selling her shares. After all, she's exceptional. :)

Tue, 08/26/2014 - 22:50 | 5147713 Peter Pan
Peter Pan's picture

The liquidation of speculative longs might also be taking place because there might be a fear that the loser might not pay out on the debt if things go horribly long.

I am not an expert in this area by any stretch of the imagination, but could this be a distant possibility?

Tue, 08/26/2014 - 23:13 | 5147788 Ban KKiller
Ban KKiller's picture

How fast does information travel now? I know I never get real information nor is it timely. The information I control I do well with, like gardens and chickens. What individual keeps their money in a bank or invests in the market? Yeah,I know, smarter guys than me! Perhaps they get valid, fast information? Sure.

Tue, 08/26/2014 - 23:30 | 5147848 fibonacci's claus
fibonacci&#039;s claus's picture

My ex use to love it when I zoomed in and out of her rabbit hole.  She had a rabbit fur lined rabbit hole to be sure.  That was a strange strange to be sure. 

I thought the flash crash happened when geitner was shaggin that hooker and her neeple accidently slapped the down button?

Does anyone else think geitner would be a great batman? 

 

Tue, 08/26/2014 - 23:35 | 5147866 ml8ml8
ml8ml8's picture

For the record, I take those "bottom of the rabbit hole" comments personally.

Liquidity risk is wildly underappreciated. Public companies typically have a market cap/valuation about 15% higher than similar companies privately held. I'm not sure that premium should exist in a market place managed by central planners lurching from one macro economic fix to the next (whether in U.S., Europe, or Asia).

There are dozens of hedge funds that didn't survive 2008 that fully appreicate liquidity risk. Unfortunately, they are no longer around to arbitrage away all or part of that "liquidity premium."

Wed, 08/27/2014 - 07:24 | 5148338 IANAE
IANAE's picture

"Liquidity risk is wildly underappreciated." Second that, and wildly misunderestimated as well. Nothing like large banks/fincos/HFs being dependent on short-term CP or conduit funding when the music stops and those with liquidity stop sharing (along with other exposures like curve flattening or inversion). But, of course, these things will never happen...

Wed, 08/27/2014 - 00:27 | 5147985 limacon
limacon's picture

Dorothy Parker, upon learning that Coolidge had died, reportedly remarked, "How can they tell?"

Money has been murdered by injudicious fiscal policies.
It's instruments like Markets are withering .

QE is but the Morphine to smooth the Death rattles.

Wed, 08/27/2014 - 00:33 | 5147993 I Write Code
I Write Code's picture

But if I clicked up my online broker I was probably trading in their dark pool anyway so wtf.

Wed, 08/27/2014 - 03:26 | 5148202 Otrader
Otrader's picture

"It's all about bucks!  The rest is conversation." - Gekko

Wed, 08/27/2014 - 08:58 | 5148599 RazvanM
RazvanM's picture

WAR IS PEACE, FREEDOM IS SLAVERY, IGNORANCE IS STRENGTH

 

"Under the spreading chestnut tree
I sold you and you sold me"

 

Wed, 08/27/2014 - 10:54 | 5149091 MrSteve
MrSteve's picture

the PBGC has a $65K limit, so there is a low cap to their coverage of any corporate guarantee.

Do NOT follow this link or you will be banned from the site!