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How Two Trades In Half An Hour Make Market Go Boom... And Unboom

Tyler Durden's picture


What's the point in commenting any more: when two discrete trades manage a nearly 1% cumulative roundtrip move in the entire market, all we can say is "good luck human" - the whale on the other side of "that" trade is far bigger than Bruno Iksil. And good luck when you need liquidity once the selling returns. The discount to the bid will be far, far more than the 5% it cost Knight to unwind its error book to Goldman.

From Nanex:

15,000 eMinis Make Market go Boom

Starting at 11:04:55 and lasting for 3 seconds, approximately 15,000 eMini contracts traded, causing a significant market disruption. At the same time, approximately $100 Million worth of SPY traded.


eMini Depth of book takes a big hit. The area circled shows a sudden drop in liquidity as a result of the sudden trade.
August 10, 2012 is the thick red line, updated to where it goes horizontal.

At 11:26:21, another 8,000 eMini contracts trade in 1 second, sending the market back up. At the same time, approximately $53 Million worth of SPY traded.


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Fri, 08/10/2012 - 12:02 | 2694294 CalibratedConfidence
CalibratedConfidence's picture

same shit new day

Fri, 08/10/2012 - 12:06 | 2694308 malikai
malikai's picture

So, if it's a fat finger when the market goes down, what do you call it when the market goes up?

Fri, 08/10/2012 - 12:14 | 2694331 Temporalist
Temporalist's picture

The middle finger

Fri, 08/10/2012 - 12:21 | 2694357 saturn
saturn's picture

Bruno = Scape, Iksil = Goat.

Fri, 08/10/2012 - 12:28 | 2694386 Badabing
Badabing's picture

After doing a thorough analysis using OHLC charts overlaying Elliott wave principle, Fabonacci ratios, momentum rate, the 200 and 50 DMA, and resistance break out trending I have come to the conclusion that the in-depth analyses just preformed is for SHIT because the market is counterfeit!

buy phys. PMs

fuck you banks!!

Fri, 08/10/2012 - 12:40 | 2694412 Hype Alert
Hype Alert's picture

So the question is, whoever (*cough* *cough*) is "Buying" this market up, how long can they keep it up because without a printer in their basement, no one can keep that up.

Let's see, Knight was able to buy the stocks down without a margin account and got caught simply because the algo ran away. I guess as someone without margin requirements, you can buy the market any way you want.

Fri, 08/10/2012 - 13:46 | 2694618 francis_sawyer
francis_sawyer's picture

Elliott [Idiot] Wavers will be along to explain all this in 5...4...3...2...

Fri, 08/10/2012 - 12:57 | 2694452 the 300000000th...
the 300000000th percent's picture

awesome post, i think you meant fibonacci ratios

Fri, 08/10/2012 - 13:43 | 2694608 Badabing
Badabing's picture

yes i did and thanks

Fri, 08/10/2012 - 13:27 | 2694531 HarryM
HarryM's picture

Can VIX go negative?

Fri, 08/10/2012 - 13:36 | 2694576 hannah
hannah's picture

BUY PM's then have a BM when you lose all your money when the gov confiscates your gold.......


BUY phys. frying pans....

Fri, 08/10/2012 - 13:46 | 2694624 Badabing
Badabing's picture

A hypothetical answer to your hypothetical post

Don’t buy Phys. PMs and miss the party to the moon



Fri, 08/10/2012 - 14:03 | 2694694 Temporalist
Temporalist's picture

Here is a little story:

A couple decides to try to protect their money by buying hard assets to protect against global monetary debasement.  They think that people will always need to eat so they invest in frying pans.  When finally the day comes they have stockpiled a garage and basement full of 10,000 frying pans.  They open a shop and find there is a problem: everyone that wants a frying pan can't afford gas or electricity to cook with.

Fri, 08/10/2012 - 17:12 | 2695376 JimBowie1958
JimBowie1958's picture

So they BARTER, dude!

That is where we are heading for a short time; barter and bullets.

Fri, 08/10/2012 - 19:41 | 2695764 hannah
hannah's picture

DOES ANYONE NEED AN EXAMPLE OF THE LIMITED ABILITY FOR PEOPLE TODAY TO THINK.... well this is it.temporalist is the poster child.

Fri, 08/10/2012 - 19:20 | 2695716 Bohm Squad
Bohm Squad's picture


Everytime I hear about Elliot waves, I throw up just a little in my mouth ( taco...see?).

Fri, 08/10/2012 - 20:26 | 2695830 tbone654
tbone654's picture

I'm not an Elliot waver... but Jesse Livermore wrote books about the same effect...  And I'm amazed at how accurate his method has been lately...  3% correction, then bounce a little, 3% up, then react a little...  Every time it hits a 3% move, you watch it to see how it handles 3% level and trade accordingly... 

complain all you want about something you don't understand, but when it comes right down to it...  it's about whatever it takes to make money...

just keep looking at the green and red columns on the right...  those change back and forth over 3% corrections...  (aka waves)

Fri, 08/10/2012 - 21:23 | 2695955 Bringin It
Bringin It's picture

Maybe the HFT algo programmer or Ben Shalom read the same Jesse Livermore books?

Fri, 08/10/2012 - 12:15 | 2694335 SheepDog-One
SheepDog-One's picture

Right theres only ever a problem if indexes went down.

Fri, 08/10/2012 - 12:16 | 2694340 Nadaclue
Nadaclue's picture

Correcting the trade?

Fri, 08/10/2012 - 12:32 | 2694396 French Frog
French Frog's picture

Why would they correct the trade?

Is it suddenly illegal to sell 15000 e-mini contracts at the same time?

Fri, 08/10/2012 - 12:51 | 2694440 bonddude
bonddude's picture

Put that mutt in the error account son !

Fri, 08/10/2012 - 12:28 | 2694383 larz
larz's picture

Nothing to see hear I just sat on my keyboard move along

Fri, 08/10/2012 - 12:29 | 2694389 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Smell my finger.

Fri, 08/10/2012 - 13:59 | 2694683 pods
pods's picture

The Shocker?

"So, if it's a fat finger when the market goes down, what do you call it when the market goes up?"

Fri, 08/10/2012 - 22:59 | 2696202 Lazlo Toth
Lazlo Toth's picture

+1 Steel Panther reference.

Fri, 08/10/2012 - 12:18 | 2694350 AccreditedEYE
AccreditedEYE's picture

Question is, at WHAT point and, more importantly, WHAT AMOUNT OF MONEY do people start waking up and getting f-ing nervous? I'm still amazed people put $$$ into KCG... without knowing what really happened! Blackstone is not just another tool in the wood shed either... Just. Wow.

Fri, 08/10/2012 - 13:07 | 2694476 Joshua_D
Joshua_D's picture

People are already waking up. What you are talking about is "momentum," i.e. when does the snowball become an avalanche? Of course, that's hard to say, because it looks like snowball right up to the point that it is an avalanche.

Fri, 08/10/2012 - 14:04 | 2694714 Muppet Pimp
Muppet Pimp's picture

After TVIX broke people were poring money into it looking for a dead cat bounce.  As it turned out all they wound up with was a dead cat.

Fri, 08/10/2012 - 12:37 | 2694381 vast-dom
vast-dom's picture


Fri, 08/10/2012 - 12:33 | 2694397 MillionDollarBoner_
MillionDollarBoner_'s picture

Deja poo

Same shit, different day

Fri, 08/10/2012 - 12:04 | 2694298 govttrader
govttrader's picture

go go VWAP...go go VWAP...yeah!!!!

Fri, 08/10/2012 - 12:15 | 2694336 CrashisOptimistic
CrashisOptimistic's picture

Look, guys.

It's very hard to accept that what you have looked at for decades is gone, but it is.  There is no longer a market.  

Just forget it.  Don't have money in it.  Ever again.  It's all over.  It's never going back to what it was.  

If you're in the market, you're not trading.  You're not investing.  You're betting.

Get your money out and buy farmland and find a farmer to sharecrop farm it for you.  It's all you can do now.

Fri, 08/10/2012 - 12:21 | 2694359 Shizzmoney
Shizzmoney's picture

In short:

"Neo.....there *is* no Market"

Fri, 08/10/2012 - 12:27 | 2694378 Hype Alert
Hype Alert's picture

I have a friend that is at a county auction right now that is doing exactly what you talk about.  This "market" is just a sick joke now.

Fri, 08/10/2012 - 13:23 | 2694520 walküre
walküre's picture

I accept a barter of your farm labor for my food. We got corn, potatoes, cabbages, carrots, onions, lettuce, peas .. and on the other side of the fence some nice hogs or lambs or beef. Plenty of work around here. Room for cottages also. Water is plenty and the barn parties are fun!

Fri, 08/10/2012 - 13:43 | 2694606 CrashisOptimistic
CrashisOptimistic's picture

Lots of people will say  . . . I don't know how to farm.  I spent my life doing other things.  I'm not a farmer.

Well, folks, in the post Peak world, farmers don't know how to farm.  You are on a level playing field if you're competing.  They don't know how to grow without insecticide, fertilizer or tractors, either.

Fri, 08/10/2012 - 23:02 | 2695983 Bringin It
Bringin It's picture


Fri, 08/10/2012 - 19:23 | 2695723 Bohm Squad
Bohm Squad's picture

Just saw an ad for binary options...thought, "Wow.  Me v. HFT...think I'll pass."

Fri, 08/10/2012 - 12:05 | 2694299 vast-dom
vast-dom's picture

POST VIDS OF THIS BULLSHIT PLS! I like to watch (the mess go apeshit). 

Fri, 08/10/2012 - 12:06 | 2694304 youngman
youngman's picture

I wonder when the commentators on TV will start talking in Bit code...111100111001101100011001011100100010010100101

Fri, 08/10/2012 - 12:08 | 2694311 Tsar Pointless
Tsar Pointless's picture

0001110101 0011110011001 100011 1100011000!

That's when.

Fri, 08/10/2012 - 12:28 | 2694384 Manthong
Manthong's picture

That's only like a 4.5 on the San Andreas..

but you might want to pay attention to a bunch of them in a row.  Hmm..

Fri, 08/10/2012 - 12:08 | 2694306 Dr. Engali
Dr. Engali's picture

Delete..double post..because my adhd kicked in.

Fri, 08/10/2012 - 12:06 | 2694307 Dr. Engali
Dr. Engali's picture

Ben your finger prints are all over this market.

Fri, 08/10/2012 - 12:07 | 2694309 Cognitive Dissonance
Cognitive Dissonance's picture

That was just a small asteroid impact. Wait until the big stuff rains down.


Fri, 08/10/2012 - 12:12 | 2694326 RockyRacoon
RockyRacoon's picture

Hey, CD!  Great image.

I think the first few words tell the story:   What's the point in commenting any more....

Fri, 08/10/2012 - 12:19 | 2694345 Cognitive Dissonance
Cognitive Dissonance's picture

The futility of commenting about market futility is

Exhaustion has settled in. Desperation will soon follow, for both observers and participants. The conclusion to these long period cycles kill everyone not securely strapped in.

Fri, 08/10/2012 - 12:22 | 2694363 saturn
saturn's picture

Is the asteroid leaving the Earth or impacting it? I cannot decide.

Fri, 08/10/2012 - 12:30 | 2694392 cosmictrainwreck
cosmictrainwreck's picture

agreed.... "depends on how ya look at it" *snark*

Fri, 08/10/2012 - 12:37 | 2694407 MillionDollarBoner_
MillionDollarBoner_'s picture

I'm hoping DC was under that.

Am I sick?

Or am I righteous?

Fri, 08/10/2012 - 13:19 | 2694507 Cognitive Dissonance
Cognitive Dissonance's picture


Recognize the unhealthy feedback loop in us all.

Fri, 08/10/2012 - 14:41 | 2694857 PiratePawpaw
PiratePawpaw's picture

If it's smart, it's leaving.



Fri, 08/10/2012 - 12:17 | 2694343 falak pema
falak pema's picture

Is that Mrs Cogdis reacting to your purty words?

Fri, 08/10/2012 - 13:27 | 2694528 Cognitive Dissonance
Cognitive Dissonance's picture

Mrs Cog is my biggest fan.

<sigh> I love mind control. :>)

Sat, 08/11/2012 - 10:20 | 2696989 RockyRacoon
RockyRacoon's picture

She has your mind so controlled that you think she likes your stuff.   Uh-huh.   Now that's what I call mind control....

Fri, 08/10/2012 - 12:20 | 2694355 AccreditedEYE
AccreditedEYE's picture

So true... and sad that $400 mill is small these days. lol

Fri, 08/10/2012 - 12:21 | 2694360 NEOSERF
NEOSERF's picture

You really don't need to worry about "the big one".  Pretty clearly the NYSE would shut down the market for the day, declare all trades during the day invalid and keep trying to restart until there was an up day...there are no rules anymore.

Fri, 08/10/2012 - 12:07 | 2694310 buzzsaw99
buzzsaw99's picture

just a glitch, happens all the time [/matrix]

Fri, 08/10/2012 - 12:08 | 2694314 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Yeah, that guy. Get him to buy Spanish bonds ...

Fri, 08/10/2012 - 12:19 | 2694349 Temporalist
Fri, 08/10/2012 - 12:22 | 2694361 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Good movie.

Fri, 08/10/2012 - 12:09 | 2694315 gunsmoke011
gunsmoke011's picture

Almost makes on wonder why - say Iraq - doesn't take a couple hundred billion they have in an offshore account and step in and CRASH this Pig. It is clear that the SEC, CFTC is incapable of tracking such trades as proven by MF Global and others. Of course - I am sure if this were to occur - they would suddenly find a way to track the trades.

Fri, 08/10/2012 - 12:35 | 2694402 Kobe Beef
Kobe Beef's picture

Who knows, someday the SEC & CFTC will find who bought all those puts on United & American Airlines, plus the re-insurers. Someday they'll find the vaporized funds of MFG clients.

Yeah, right. The USSA does not have a government. It has a mafia. The markets, the banks, the legal system are rackets, pure and simple.


Fri, 08/10/2012 - 12:11 | 2694316 hedgeless_horseman
hedgeless_horseman's picture



Send my regards to...

...The Ministry of Wealth.

Fri, 08/10/2012 - 12:09 | 2694320 Cheater5
Cheater5's picture

Maybe it was a "Fat Finger" trade that had to get reversed...

Fri, 08/10/2012 - 12:12 | 2694327 fuu
Fri, 08/10/2012 - 13:25 | 2694525 slewie the pi-rat
slewie the pi-rat's picture

i'll tell blythe;  it's yer turn, right?

brianSack's newEdsel w. push-button tranny?

Starting at 11:04:55 and lasting for 3 seconds, approximately 15,000 eMini contracts traded, causing a significant market disruption. At the same time, approximately $100 Million worth of SPY traded.

hi brian! zH hearts yer criminal bankster's tools, dude!  semper screwed down tight 4evah!

Fri, 08/10/2012 - 13:30 | 2694551 fuu
fuu's picture

Tell her to take her glass eye out first.

Fri, 08/10/2012 - 12:12 | 2694328 Neethgie
Neethgie's picture

Manchester united's new signing bruno iksil sure has his work cut out to

Fri, 08/10/2012 - 12:13 | 2694330 busted by the b...
busted by the bailout's picture

"This only a test of the emergency PPT.  If it had been a real emergency you would have been instructed to go shopping or buy stocks immediately."

Fri, 08/10/2012 - 12:16 | 2694337 Mysteerious Roo...
Mysteerious Rooshian Vooman's picture



OT, but Great God in Heaven! Can it get any worse?



Fri, 08/10/2012 - 12:34 | 2694400 GERxit
GERxit's picture

This is fucking crazy!!!

Fri, 08/10/2012 - 15:17 | 2694973 RockyRacoon
RockyRacoon's picture

...officers made an arrest to prevent a possible breach of the peace.

So, pre-crime arrests are now the order of the day.  Philip K. Dick would not be amused.

Fri, 08/10/2012 - 12:16 | 2694339 Headbanger
Headbanger's picture

I'm waiting for  the markets to stop trading completely when  all the algos 

finally reach their equilibrium points.

Sat, 08/11/2012 - 06:56 | 2696651 StychoKiller
StychoKiller's picture

There will be massive oscillations BEFORE equilibrium, my friend. :>D

Fri, 08/10/2012 - 12:17 | 2694341 youngman
youngman's picture

I bet it was just the new investors of Knight Capital trying out their new computer they just aquired...

Fri, 08/10/2012 - 13:30 | 2694547 ThisIsBob
ThisIsBob's picture

Dude, your getting a Dell.

Fri, 08/10/2012 - 12:18 | 2694346 Father Lucifer
Father Lucifer's picture

Fucking amazing as I have watched in awe this morning wondering how the fuck do they do this. Eventually like all complex systems there will be a catostrophic failure someday and as we saw with Knight there is no redundancy to or self check to stop the inevitable.

Fri, 08/10/2012 - 12:17 | 2694347 NEOSERF
NEOSERF's picture

Financial terrorism....probably Knight testing a new algorithm...

Fri, 08/10/2012 - 12:21 | 2694353 CvlDobd
CvlDobd's picture

I'm going to print these pretty charts on a wall sized canvas. Fling Jamie Dimon's own fecal matter across them and have Sotheby's sell them for millions on the un manipulated fine art market.

Fri, 08/10/2012 - 14:29 | 2694808 Hi Ho Silver
Hi Ho Silver's picture

That's nasty. They should sell well.

Fri, 08/10/2012 - 12:22 | 2694364 vertexa
vertexa's picture

US Banks Told to Make Plans for Preventing Collapse

U.S. regulators directed five of the country’s biggest banks, including Bank of America and Goldman Sachs, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

The two-year-old program, which has been largely secret until now, is in addition to the “living wills” the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.

Fri, 08/10/2012 - 12:23 | 2694366 HardAssets
HardAssets's picture

Yep - - - HAL is trading now

Fri, 08/10/2012 - 12:29 | 2694390 Headbanger
Headbanger's picture

No, I think it's just R2D2 and Deep Thought at it now.

Fri, 08/10/2012 - 13:18 | 2694503 viahj
viahj's picture

thanks for the tip, have you seen C3PO?

Fri, 08/10/2012 - 13:13 | 2694492 NoClueSneaker
NoClueSneaker's picture

... HAL replaced AE-35 unit with MSN ... David still thinks he in charge :-P

Fri, 08/10/2012 - 12:24 | 2694369 Squid Vicious
Squid Vicious's picture

well at least the SPY volume will look good for the day, maybe that was the goal... when they close it up .05 handles in the last 3 minutes, Maria can say we closed up on the highest volume day of the week, blah blah, lisp lisp...

Fri, 08/10/2012 - 12:25 | 2694371 haskelslocal
haskelslocal's picture

Where's the failed O-ring?

Fri, 08/10/2012 - 12:25 | 2694373 Everybodys All ...
Everybodys All American's picture

Fundamentals changed. /s

Fri, 08/10/2012 - 12:38 | 2694374 sitenine
sitenine's picture

More death throws. Time is running out to get out folks. The bailing wire, duct tape, chewing gum, and hopium holding this shit together will not last much longer. You know what to do - try not to over think it. Sell paper, buy assets, and keep your powder dry.

Fri, 08/10/2012 - 12:39 | 2694414 haskelslocal
haskelslocal's picture

This post reminds me of when I was a kid and my brother showed me Santa Claus flying away in the sky.

He pointed to a star and said, "that's him" and with no way to know the difference, I believed and trusted my brother.

I saw Santa Claus that night because my brother showed me a "picture in the sky" and I believed him. I had no other choice.

Do I have a choice here Tyler? Is that Santa Claus?  




Fri, 08/10/2012 - 12:48 | 2694437 Headbanger
Headbanger's picture

There is no spoon

Fri, 08/10/2012 - 12:43 | 2694422 Headbanger
Headbanger's picture

I think the people who  change the batteries in all the robot traders are all on vacation

Fri, 08/10/2012 - 12:50 | 2694439 AdrenalineTrade
AdrenalineTrade's picture

Just to confirm, the market only goes up right?  I wanna put my life savings to work here.



Fri, 08/10/2012 - 12:51 | 2694444 Trichy
Trichy's picture

My guess is that someone wanted to mess with the algos, an algo wont be armed to hit 15000 minis.

Fri, 08/10/2012 - 12:53 | 2694445 Pepromene
Pepromene's picture

Martians have escaped from area 51 and are paying us back for keeping them imprisioned for all those years

Fri, 08/10/2012 - 12:56 | 2694448 jmeyer
jmeyer's picture

Would the presence of a CME S&P emini dark pool help or hurt ?

Fri, 08/10/2012 - 12:59 | 2694457 Blopper
Blopper's picture

With a much larger whale supporting the market, it will be tough for the short seller humans to collapse the market.

Fri, 08/10/2012 - 12:59 | 2694458 Paul67
Paul67's picture

"Interesting game, the only winning move is not to play"

are we learning yet......?

For example, if you don't hold it, it's not yours. 


Fri, 08/10/2012 - 13:10 | 2694482 Everyman
Everyman's picture

We need to get a militia together and take out SKYNET bu attack8ing the microwave emitter towers.  Just get a high power and shoot the microwave emitters at certian times of the trading day to disrupt SKYNET.  Reuters had the map of the line of microwave towers by company.



Fri, 08/10/2012 - 13:12 | 2694486 SmoothCoolSmoke
SmoothCoolSmoke's picture

Bottomline: for 99.99% of the sheeple regarding the markets - If the Dow Jones is up, ain't nothing wrong.  No need to 'investigate" activities of an up market.  SkyNet knows this and act accordingly.

Fri, 08/10/2012 - 13:23 | 2694518 PeaceLover
PeaceLover's picture

Some one help me out here!
Isn't the e-mini tied to the SPY and doesn't the CME use wash trades(ghost trades) to balance..
I have seen 6000 and bigger lots go thur Time and sales charts in off hours and have gone back to retrive the data and it will not be there!


Point is who watches the ghost traders and like congress who knows when that is going to happen.
I could sure figure out how to spend the money I could make knowing when and how much!



Fri, 08/10/2012 - 13:28 | 2694535 EclecticParrot
EclecticParrot's picture

Just happened again on a smaller scale, between 13:10 Eastern Time and 13:15, with highest volume at 13:14.  Looks like this was pure stop hunting, as we've now blasted back to the 1-min Keltner top (2.0/2) at the game-playing 13:25 (i.e., pre-1:30) decision point.  My bet is we blast back up to VWAP by 2:00, but if we don't it will only be because "my algo is bigger than your algo, " and it's clear that, in these low-volume card games, size matters.

Fri, 08/10/2012 - 13:29 | 2694540 orangegeek
orangegeek's picture

Pushing markets higher gets Obama re-elected.  Pushing markets higher pushes oil higher - this costs Obama the election.


Now invert the statement.


Press play and enjoy the show folks.

Fri, 08/10/2012 - 13:42 | 2694594 mccoyspace
mccoyspace's picture

big drop in EUR/USD at exactly the same time. from 1.2314 to 1.2291 in the same 5 minute window. 

Fri, 08/10/2012 - 14:07 | 2694727 Doublescythe
Doublescythe's picture

Whatever man, I'm just taking scalps all day long in this bullshit market. Computers control the whole thing, and really, what is money - it's just moving digits on a screen up and down so I can buy "stuff". 


Yes, I see the matrix, and the steak tastes good.

Fri, 08/10/2012 - 14:18 | 2694763 orangedrinkandchips
orangedrinkandchips's picture

Equity Arb HFT


You see em take it down 5 pts, the entire market that is, and then back up 5. TOO EXACT FOR HUMANS.


fuck it all

Fri, 08/10/2012 - 14:27 | 2694797 jackinrichmond
jackinrichmond's picture

BAN HFT's  !!!

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