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Just One Question About Yesterday's Last Minute "Berserk ETF" Freak Out
With 4 seconds to the close of yesterday's epic trading session, someone executed over $200 million and 1,147 trades in SPY - the S&P 500 ETF - in one-second, lifting the price to a S&P level of 2,130. This massive-loss-making "fat-finger" - resulting in millions of losses - would normally be followed by "probes" from the exchange into "erroneous trades" and then rapidly accompanied by the exchanges busting all the losing trades. But not this time! In all other cases of fat-finger'd and busted trades, we have learned who the counterparty was - even Goldman Sachs was exposed after regulators DK'ed its busted trades several years ago. So, the question is - why hasn't the other side of yesterday's berserk "fat-finger" buying spree in SPY spoken out in anger that its massive money losing trade will not be DKed?
And just who is this mysterious, money-losing yet completely blaze counterparty.
With 4 seconds to go in today's "market" day-session, this happened in 1 second:
Then we get the normal follow-up:
- NASDAQ ISSUES E-MAILED STATEMENT ON 'SPY' TRADES
- POTENTIALLY ERRONEOUS `SPY' TRANSACTIONS BEING PROBED
- TRANSACTIONS WERE EXECUTED BETWEEN 15:59:00-16:00:00 ET
But... then... an odd thing happened...
- ALL TRADES IN 'SPY' WILL STAND
So why would the massive losing counterparty on these far out of the money trades not come forward? Complain? Explain? And who can afford to swallow losses on that scale so easily.
As we suggested yesterday, probably because the Fed is willing to "eat" the losses rather than explain why it buys SPY, via Citadel, on DirectEdge.
Think that's just conspiracy theory wonkishness? The BoJ do it openly and publicly... The ECB have admitted it as a possibility... so why not the central bank uberlord, The Fed? What would that reality do to the "free market" assumptions of The US Capital Markets where even the USA Today now blasts "Fed to the Rescue"?
Caught Fed-handed? We'll never know.
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Other side...lol...as if there are still two sides to every trade!
How positively quaint!
Well the perps of these anomalies make so much $$ the fines for their actions mean nothing to them.
Http://hedgeaccordingly.coM
Fines?
Masturbatory quotes and trades are totally legal, and profitable!
Could it be that the trade was essentially a wash trade for the parties involved?
Except that it wouldn't be a wash trade for those exposed to short coverings, would it?
I'm guessing here and I'm at the limit of my understanding on this.
Does the FED still own the Red Roof Inn or were they able to sell it?
http://y2u.be/VI6tBwVjyOY
Asshole.
Does the FED still own the Red Roof Inn or were they able to sell it?
http://y2u.be/VI6tBwVjyOY
When you can create a the money you need with all push of a button you don't worry about covering your losses.
I believe that the "Market" is so rigged that the FED along with the last 4 major banks do WASH trades all day long while taking the "Market" higher and selling of part of the stocks they hold. If you're a "BANK" you get shares for free through IPO'S and from free cash thru ZIRP and QE. After the next Crash more free money to buy shares 50-60% lower than today. Rinse Wash Repeat. So if JP was short from 2000 and Goldman Sachs long, Goldman buys 2120 from JP and all gets washed around 2060. That might sound crazy but in today's world ??
“The Fed has now taken upon itself a third remit, which is the administration of American equity prices.” - Jim Grant
"...major banks do WASH trades all day long..."
Did the FED learn from Enron, or did Enron learn from the FED?
I say who gives a shit, keep stacking. :)
I'm confused with all of these overlapping hedges. Are we hedged accordingly, or are we hedgeless?
Aw horse shit, just take it all!
i cant believe hedged got edge from hedge for first....thanks hedge glad to see hedge finally edged...maybe hedge will get the hint now and leave the hedge
Banks Are Allowed to Deduct 75 Percent of Fines Imposed by Justice Department
Lynnley Browning, Newsweek
Browning writes: "A big chunk of the hundreds of billions of dollars banks have paid in settlements to various federal agencies and regulators since 2010 is deductible from the taxes banks and lenders pay."
READ MORE
Predictive programming probably, QE4 by Christmas.....
https://www.youtube.com/watch?v=V0GDcA-gqY4
Tyler. I hope you tweeted this to the "dickhead" at the Fed so he can answer you?
Well fuck it, I'm going long now at 206 and putting my sells in at 212. I like my chances!
Mr. Huxley has set the price.
I 'heart' central planning!
This has been the best 5 years of my entire career.
Worst five for my career. However, I have a new kid and my wife is getting hotter for some reason. So, on balance I am level.
Al...Baby..., how do you know what is real and not? It is like trying to catch light in a glass jar and save it for a rainy day.
I'll remeind all the short bets ( IF there are any left ) that NO BANK has to cover any short if they are in the loosing lane on that bet....thank you George Bush Excutive Order still in effect from 2008.
Well, I figure there's no risk. Even if I can't get rid of it today, I'll be deep in the money by end of next week latest.
K-Hen to the rescue!
luckily the Fed is able to just absoorb these losses and pass them back to the taxpayer. it is conveniently hidden in the money the fed gives back to the US Treasury every year for interest payments US taxpayers paid the Fed for printing money to buy US debt. confused? i dont blame you. now, explain how this is NOT a ponzi scheme......
Yes, This "free market" trading is a sight to behold. Wonderous!
Can you imagine what it would act like if it were rigged?
Easy print, easy go.
You know, I know, and they know who did it? But what none of us know is why? Can Fed employees make mistakes? Of course they can. Was it a mistake? Hmmmmmm. Not likely if by mistake you mean pushing the wrong keys on the keyboard. But maybe whoeverwas instructed to do it, neveronce thought about whether the other side of the trade was really liquid. Appears not. So for me the more important question is who profited from the trade at such elevated levels - and were the ywaiting in the bushes for it based on advance knowledge? Who? Who? Who? made money on this deal?
Why you axing all them questions ? Make a statement !
https://www.youtube.com/watch?v=C1pkVrHKDik
Likely the same Cretins that profited from puts on AA on 9/11.
Just mash the buy button all day at the Fed....if it's profitable then keep it....if it's a loser, taxpayer picks up the tab.
PEPSI SYNDROM.....melt down.....Nature abhores a vacuum, these trades are a vacuum and one day chaos, out of control chaos.
If the North Koreans can get into our computer systems, they will get into the market computers too.
Hilarious. Now the algos have a target to retest. Maybe the fed accidentally showed their price target for 2015. Annual high still showing 212. lol
thats the 2014 year end target. watch the low volume melt up start monday.
doesn't really expain why Dow and S&P futures went mental 9 hours later at 6:15 GMT when they hit 17910 2079 explain that one, did FRBNY buy the futures there as well?
jubber,
Spot on, I wondered that this morning when I came down and looked at my charts...a WTF.
DavidC
Yep a lot of people who shorted after hours, subsequently got killed later with 100 more Dow points up their arse
I would have been very happy to sell $200 million - especially right after a big two day gain. Then I could sit back and enjoy NOT being in the casino over the Christmas holidays!
The Fed is more attached to the idea of plausible deniability than it is to losing millions.
We wealth effected some folks.
its their mark to show everyone where they are going to manipulate the market to. they will not have losses. no one can stop them, been going on for 6+ years. just buy SPXL , UPRO, calls in SPY etc and watch your fiat money grow. only risk--black swan event. don't dis me, just an observer and the messenger. the doom can't be allowed to happen.
U won't be dissed for your highly accurate post.
If I hadn't run into this site, 5 years ago, I would be at the Isle de France beach bar in St. Barth's eating langouste, Salade Nicoise, and pommes frites with a permanent Zonker tan, Planter's punch, and getting ready for my party aboard my 200 foot yacht, "SUCKAS", sailing, and overnighting in St. Lucia with Mick Jagger for company.
J B T F D.
This sweeetest, shortest, most lucrative advice EVER given, and free of any charges, fees, subscriptions or other ripoffs.
To all those who have optimistically done this, never looking for the bear, congratulations and may the wind be always at your back.
As nothing else could, this advice has proven once and for all that the world looks down and smites with great vengeance upon the unbeliever, the pessimist, and all the triple ETF short funds.
And rewards the Optimist with Midas like riches, lotsa nookie, and you can do it as a Republican, democrat or independent. Even Commies can get rich.
Ditto.
A fool can see what they are doing. Only a Soul-less Criminal Pinko Fascist Commie would even think of profiting from it. Remember what team you are on. Your actions define you.
I usually see these strange massive SPY (the chart above is off by a decimal) spikes up and down during AH. I always assumed it was option-related, e.g. someone buying cheap out-of-the-money options, banging the ETF, and somehow reaping a profit in a nanosecond while they were in the money. Once when I brought this up with a broker, he dismissed it as a bad print. Not helpful. Can anyone explain what's happening?
Yes. It's called manipulation. It's called fraud. It's called using taxpayers' money when they are on the hook, ultimately, for any losses that are made.
DavidC
Does the FED still own the Red Roof Inn or were they able to sell it?
Cause its a Ponzi and when the ponzineer does it everything is fine, anybody else there would be an investigation unless your Jon Corzine of course
Another awesome zh report. Central banks, destroyers of worlds.
North Korea?
From AJ? Classic!!!!!
Not that NYpost is Main Stream but it is a stream, or maybe a creek, or at the very least a gulch.
‘Plunge protection’ behind market’s sudden recoveryBy John Crudele
These forces may be working from a script in the “Doomsday Book,” which the US government recently fought to keep secret when it was brought up last week during the AIG trial in Washington.
Here’s the bottom line: Someone tried to rescue the market last Wednesday. And it’s becoming a regular occurrence.
The details of last Wednesday morning are these: At the same time the Dow was off 350 points, the S&P index was down 43.80 points, That was an enormous decline in just 11 minutes of trading and it was an indication that Wall Street was not having a good day.
Then, someone (or something) started buying S&P futures contracts en masse. Twenty-one minutes later, the S&P index had regained 30 of those lost points and was back at 1,861.
http://nypost.com/2014/10/20/plunge-protection-behind-markets-sudden-recovery/
The FED does not give on whit about losing taxpayer money, nor punishing taxpayers for the sake of banks.
Our Nation has been destroyed by these Maggots and we must continue on as if he do not know or do not care...
Why are they not drug out into the streets and executed? Because we are all too content and we have food in our stomachs. .No matter that in the future it will implode and they will use the State to come after all who do not conform..
maybe one day something will spark and awakening where people are no longer afraid to speak the truth and execute Justice.
I wacked off in 10 seconds? Does that count?
Kidding. Looks like are army of US IB Goldman financial terrorrist are going to invest in new propaganda threats.
Fuck the Fed...I wish that felt better.
Holiday gift from the Fed to the Banksters.............
Unless . . . the offending party is so large, the risk of 'reputational' impact from the world sniggering over their folly was deemed larger than the $loss.
who of you guys, would do the same (if being FED)?
how many of us would avoid to be a crook?
everyone would do it the same way, if having the same unlimited money power, like the FED has.
the market is cornered. there are no stocks for sale. it only takes a wee bit of buying pressure to jack the s&p 100 points in a nanosecond. we don't know that the fed had anything to do with the spike but we can safely assume that the squid didn't lose anything on the trades or they would have been busted.
How can they be losses when the Fed isn't even dealing with real money? It's all fake.
2130 was going to be the top then... now they will have to change it.
phew! Good thing it's not rigged. That was a close call.
ho ho ho - merry Fedmas - Corzine Claus
Why was it a losing trade? S&P 2150 by Jan. 15th
Looking at the chart for SPY, the same volume spike and the same trade(?) was executed the day before at 1:55.
the fed shorted them and citidel has been covering them all day. kenny g has alot of alimony to pay. this should keep her quiet. her cell phone and email needs to be hacked. ken griffin needs one....................
I'm shocked!
Old ZH meme which is /sarc in this case.
I'm not shocked, just ahhhhh...lemme think.
apalled? Disgusted? Pissed off these fuckers have no oversight from anybody while they ream what is left of the middle class and the 95%ers. A whole lot of things.
But not shocked. This is business as usual for these CB and TBTF fuckers, and will remain so until the ropes and pitchforks come out.
Okay I confess
I thought I was entering a sniping bid on eBay at the last second by accident
Wrong window
Sorry
Oh, don't worry. At some point in the future we'll know if the Fed is directly interfering with equities, and sooner rather than later if Rand Paul is elected President. And I have to say, Rand Paul has been positioning himself effectively. Just today he was blasting Rubio for being an isolationist! Can you imagine Ron Paul doing that? No way. So Rand is definitely positioning himself more moderately than his father. IMHO, he's the front runner for the GOP nomination at this point. Hillary is laying low publicly b/c she knows her primary weakness at this point is possible over exposure, but she's raising hella cash behind the scenes. It's going to be an interesting 2015 and 2016 runup to the election, especially if Abenomics fails and Japan or any EZ country has a debt bomb finally go supernova that threatens to take a major banking system with it.
No shorting allowed. That is the first rule of Fight Exchange.