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Broken Market: Short Muni ETF Flash Smash +43%

Tyler Durden's picture




 

Presented with little comment except absolute incredulity that this is still occurring day-in and day-out with no real discussion beyond our friends at ITG...

*SHORT MUNI ETF PAUSED BY CIRCUIT BREAKER ON RISE OF UP TO 43%

SMB just jumped 43% in seconds on a string of 100/200 lot trades cascading up and then disappearing as circuit breakers halted it.

 

and courtesy of our friends at NANEX:

From $17.84 to $25.54 in 5 seconds!

And where the quotes really went... "Dear Mary, thank you for the wonderful stub quote ban"...

 

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Tue, 02/28/2012 - 14:49 | 2204824 Alex Kintner
Alex Kintner's picture

Isn't it called a 'no limit' order?

Tue, 02/28/2012 - 14:54 | 2204855 HoofHearted
HoofHearted's picture

Nothing to see here, Ms. Whitney. Move along.

Tue, 02/28/2012 - 14:58 | 2204873 GeneMarchbanks
GeneMarchbanks's picture

Too soon, dude. A little decency and sensitivity please.

Tue, 02/28/2012 - 15:04 | 2204908 iDealMeat
iDealMeat's picture

He's talking about  Meredith.. 

Tue, 02/28/2012 - 15:19 | 2204952 redpill
redpill's picture

He meant he just got done spanking off to Meredith's wikipedia photo and hasn't recovered yet.  Give the man some time you ruffian, he's feeling vulnerable!

Tue, 02/28/2012 - 15:21 | 2205023 TruthInSunshine
TruthInSunshine's picture

Waddell & Reed must be dealt with once and for all.

Tue, 02/28/2012 - 15:24 | 2205053 redpill
redpill's picture

Would you like a voluntary fat finger amputation to go with that voluntary haircut sir?

Tue, 02/28/2012 - 15:00 | 2204888 greased up deaf guy
greased up deaf guy's picture

you forgot the best part :)...

http://www.youtube.com/watch?v=5NNOrp_83RU

Tue, 02/28/2012 - 15:02 | 2204898 Market Efficien...
Market Efficiency Romantic's picture

haha, probably advising her triple PhD 18-year old wiz kid spouse how to really please her

Tue, 02/28/2012 - 16:34 | 2205398 MachoMan
Tue, 02/28/2012 - 14:50 | 2204829 czarangelus
czarangelus's picture

Quit it with the conspiracy theories Tyler. They obviously increased 43% in value over those all important seconds.

Tue, 02/28/2012 - 14:57 | 2204844 slaughterer
slaughterer's picture

robo-kill a comin'  -- the 'bots will short it all apart in a millisecond.....  -- you fast enough, punk?

Tue, 02/28/2012 - 14:53 | 2204842 YesWeKahn
YesWeKahn's picture

It's time for a fruit bubble v1.

Tue, 02/28/2012 - 14:54 | 2204847 Manthong
Manthong's picture

Nice to know that the market is controlled by a bunch of computers with brains that are the digital equivalent of a suicidal manic fanatic muslim off his lithium and on PCP in the middle of a synagogue armed with a suitcase nuke.   

Tue, 02/28/2012 - 14:56 | 2204869 pods
pods's picture

Or you could have just said Santorum at the Bunny Ranch?

pods

Tue, 02/28/2012 - 16:23 | 2205335 tekhneek
tekhneek's picture

Who?

The funny part is, it's probably true.

1. Santorum The sometimes frothy, usually slimy, amalgam of lubricant, stray fecal matter, and ejaculate that leaks out of the receiving partner's anus after a session of anal intercourse. Named, by popular demand and usage, after legislator Rick Santorum because of his homophobic political statements. Example usage: "That move was about as slick as santorum!"
Source
Tue, 02/28/2012 - 14:53 | 2204848 Piranha
Piranha's picture

the market turns around, quick ben, mario run down in the basement and crank up the printing press

Tue, 02/28/2012 - 14:54 | 2204856 Dr. Engali
Dr. Engali's picture

I feel sorry for the poor robot who bought the top only to be down 43% in a millisecond. That'll come out of it's bonus.

Tue, 02/28/2012 - 14:59 | 2204878 NotApplicable
NotApplicable's picture

Stupid robot! That'll learn it.

Wed, 02/29/2012 - 04:59 | 2207119 StychoKiller
StychoKiller's picture

It wasn't me, I'm only a bender!

Tue, 02/28/2012 - 14:54 | 2204862 lotusblue
lotusblue's picture

You see this every day and wonder- where is the SEC.

 

Tue, 02/28/2012 - 14:57 | 2204868 NotApplicable
NotApplicable's picture

YouPorn.com

Tue, 02/28/2012 - 14:59 | 2204881 WonderDawg
WonderDawg's picture

Where is the SEC? Why, they're running interference for the criminals, of course. They aren't here to regulate, they're here to protect the banksters from the enforcement of regulations and law. They serve and protect the banksters, not the investors. Duh.

Tue, 02/28/2012 - 15:27 | 2205068 lotusblue
lotusblue's picture

Wow,really?

Tue, 02/28/2012 - 15:58 | 2205233 WonderDawg
WonderDawg's picture

Ah, so it was a rhetorical question? Sorry, I missed that.

Tue, 02/28/2012 - 15:00 | 2204889 juggalo1
juggalo1's picture

How is it that traders don't have limit orders and trade triggers in place to punish bullshit like this?

Tue, 02/28/2012 - 15:03 | 2204901 Flakmeister
Flakmeister's picture

What serious trader would dabble in that bullshit ETF (likely ETN)....

This kind of security is designed to part people that are not as smart as they think from their cash...

Call it getting MF'd legally....

Tue, 02/28/2012 - 15:04 | 2204909 JPM Hater001
JPM Hater001's picture

The algo is the limit caller.

Tue, 02/28/2012 - 15:05 | 2204919 Market Efficien...
Market Efficiency Romantic's picture

Show them the limit order and they trick you the other way... they don't play books with orders adverse to their interest. You don't really think you trap such predators with limit orders in the book, do you

Tue, 02/28/2012 - 15:46 | 2205167 optimator
optimator's picture

The'd simply cancel the trade.

Tue, 02/28/2012 - 15:59 | 2205238 Willzyx
Willzyx's picture

HFT has limit orders.  They just change REALLY fast

Tue, 02/28/2012 - 15:04 | 2204907 monopoly
monopoly's picture

And on and on it goes. What a pathetic excuse for a market.

Tue, 02/28/2012 - 15:05 | 2204917 I should be working
I should be working's picture

It's the Whitney flash crash!

Damn should have bought that and set a stupid high sell limit order.

Does anyone know when the circut breakers close trading?  Is it after a certain price is hit or is it based on volume?

The Dow does not like being over 13k.

Tue, 02/28/2012 - 15:09 | 2204939 El Hosel
El Hosel's picture

 Check,   ....... We will look into this as soon as the MF investigation is finished.

Tue, 02/28/2012 - 15:12 | 2204959 Village Smithy
Village Smithy's picture

The sad truth is that what just happened to SMB is what happens to SPY and the ES every day, just in a slower and more deliberate manner.

Tue, 02/28/2012 - 15:17 | 2204967 Catullus
Catullus's picture

That's what slamming the exits shut looks like. 100 share lots?! That doesn't sound like the normal HFT bots. That's run for the exits.

Tue, 02/28/2012 - 15:21 | 2205025 I should be working
I should be working's picture

Man that sure would suck if you put in a market order to buy that at the wrong time.  Never ever buy with a market order.  

I don't understand the ETF though, it says short muni, but it's clearly moving with the muni market not against it.

Tue, 02/28/2012 - 15:29 | 2205077 CvlDobd
CvlDobd's picture

Think term.

Tue, 02/28/2012 - 15:28 | 2205066 q99x2
q99x2's picture

Fed algo beta release.

Tue, 02/28/2012 - 15:51 | 2205199 dwdollar
dwdollar's picture

I wonder what the SEC was masturbating to today.

Tue, 02/28/2012 - 16:08 | 2205278 Willzyx
Willzyx's picture

Look at the spreads between the bids and asks.  25/56 between 13:31:07 and 13:31:08.  Some idiot robot kept buying at the best ask, while someone else kept rasing it. 

Tue, 02/28/2012 - 16:08 | 2205282 Schmuck Raker
Schmuck Raker's picture

I often hear estimates that 40% of trades are attributable to HFT.

Does anyone know what volume of bids and offers is HFT traffic?

Tue, 02/28/2012 - 16:19 | 2205321 CapTool
CapTool's picture

I used to make a market in these for a firm still in existence, but my job is gone. Create redeems are a nightmare, and if you had a market out there it would have stoped this, however we couldn't get volume necessary to trade, since any trade occured anywhere we weren't. basically its a machine frontrunning existing orders.  All the real market makers who based off price of underlying are gone, we either couldn't short, couldn't create, or got run over when theres a blip in the underlying. This is what you get when only the machines are left.

Tue, 02/28/2012 - 16:20 | 2205325 CapTool
CapTool's picture

I used to make a market in these for a firm still in existence, but my job is gone. Create redeems are a nightmare, and if you had a market out there it would have stoped this, however we couldn't get volume necessary to trade, since any trade occured anywhere we weren't. basically its a machine frontrunning existing orders.  All the real market makers who based off price of underlying are gone, we either couldn't short, couldn't create, or got run over when theres a blip in the underlying. This is what you get when only the machines are left.

Tue, 02/28/2012 - 16:49 | 2205483 The Proletariat
The Proletariat's picture

It's much easier to have machines do "God's work"

Tue, 02/28/2012 - 17:07 | 2205586 Bernankster
Bernankster's picture

Silly people... chasing paper with paper. We were bored and needed some entertainment. Thanks for the laughs. Love, Benny B.

Tue, 02/28/2012 - 17:47 | 2205757 JW n FL
JW n FL's picture

 

 

There you go again Tyler!!

Regulating the Market Participants!

Regulators! Mount Up!!

 

I wonder who was getting held hostage? so that someone elses monies could be protected via the walk back / un-wind.. keep one side wound up.. only to make some others unwind..

 

I want my silicon plug in! so that I can be part of the pass around sub-penny crew!

its not fair! WAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA WAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA (baby crying)

Sat, 03/03/2012 - 01:02 | 2219182 q5251355
q5251355's picture

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