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Stop Loss Terminator Algo Reemerges, Picks National Bank Of Greece As Today's Victim
You have seen it before in action, first in nat gas, then in crude (with some caveats), now see it morphing to plain vanilla products... like stocks. Observe the stock chart below: it shows the trading in the stock of one of the most insolvent companies in the world: the National Bank of Greece. The pattern should be familiar. It is the very comparable "fractal" algo pattern that we have grown to love and miss. Granted, as Nanex points out to Zero Hedge, the underlying dynamics are different from those observed before, although the end game is obvious: hunt for loss triggers on both the up and the downside, and hope to precipitate a stop loss collapse or surge. How the underlying engine generating the trading pattern is positioned in parallel to the underlying, certainly via options, is unclear, although it is obvious that the ulterior motive is to generate some very dramatic short-term liquidity. Not surprisingly, after it completed two quick cycles, the algo disappeared and was not seen from again. Expect to see it migrating through other less liquid stocks as it continues its prowl for stop loss triggers.
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Why it is legal to do this via automation is beyond me.
What a fucked up world.
The fact that you understand the implications of algo manipulation, suggests that you are far ahead of the global voting public.
Can an algorithm be hung from a lamp post, with a rope? How about the machine on which its instantiated? Its author?
How about the people who pay to have it written and then power it up.
The crying shame is that the rocket scientists who write them are genuinely smart cookies who could be used to help the US in areas such as energy efficiency. But money talks.... Just another example of how Wall St corrupts at the expense of Main St.
Great point! Think of all the trillons spent by tyrants to control the masses and the brain power wasted in carrying out their tyranny! Think of how useful all that money and brain power could have been toward the betterment of mankind. To me, this is the saddest part of our times.
Tuco Benedicto Pacifico Juan Maria Ramirez
Agreed. It should be like medical software and the ethics/responsibility that goes along with it -- you type 'Run', double-click, whatever; your balls.
Free market my ass.
"Make the rope tight! It has to hold the weight of a pig!"
Tuco Benedicto Pacifico Juan Maria Ramirez
The fact that he has a pulse suggests that is far ahead of the global voting public. The fact that he understands algos puts him in the top .1%!
Tuco Benedicto Pacifico Juan Maria Ramirez
btw this is the shit they used to do in the bucket shop days to flush suckers with 1% margin...high tech yeah but same game...Livermore wrote about it
yup. the other difference is, 80 years later, the anono crooks vastly outnumber the coppers....and both groups know it.
The software was originally designed to protect traders, especially the little ones from taking heavy losses. Some of these early wild blips I am sure were just accidental - a product of behavioural pricing, but what happened of course is somebody else figured out the easy hack to manipulate the prices with heavy trading to take it to zero and back. Wipes out everyone in a split second and only the big guys end up eating the cake.
I think the hunter-killer algo described here searching for stop loss triggers sounds like a bit too much hard work. The easy hack can be done if you know the value of the stop loss on the majority of accounts, and the only people with that data are the brokers. What's the old saying? The game is rigged and only the house wins in the end.
Double post ....Deleted.........
Locals have been doing that since the beginning of the trading pits. This is nothing other than the same action in electionic markets. You need to educate people on how prices go up (or down) the are bid or offered. They dont have to trade at any of the bids or offers. Your 'print' use to be an indicator of a trade but not anymore.
Exactly, "running the stops"! As old as the markets themselves.
Tuco Benedicto Pacifico Juan Maria Ramirez
JNPR flash crashing as we speak, down 13%
AMZN flash crashing up $13
How many hedge funds blew up today???
re JNPR, nothing a few thousand layoffs can't fix.
Amazon's earnings sucked. Must be why the market likes it so much.
http://sec.gov/Archives/edgar/data/1018724/000119312511197473/dex991.htm
Yes they sucked even more YOY - but the algos only know that they "beat the street" and Maria puddled gallons
http://t.co/I31Y0FX
As the TBTFs become more desperate, their deeds will become more obvious.
The only victim, if this ever gets prosecuted, will be some poor programmer fired by the likes of Goldman Sachs and Deutsche Bank, subsequently being put on trial and that's about it.
A slap on the wrist by the SEC as always.
That's why I was a huge proponent of the custard pie attack against Murdoch.
Fines don't hurt them, folks.
Fines don't hurt them.
But custard pie, OH MY, leaves a mark!
It's the only thing that's barely legal.
Of course you can increase the dosis any time you want, but at your own peril.
LOL...
I do like your style, Mr. Stein.
Beware of Wendi Deng.
I heard she delivers a hard right hand punch.
Proof that Chinese wives are the best there is. Murdoch is no fool. His time is just up.
Since when is battery legal?
Some appropriate comment reading music:
http://www.youtube.com/watch?v=fvP0uwl3Q6A
why so many breasts? - test
It's their job, grouse, ZH is trying to keep us all a breast.
The solution to weaponry is not to outlaw them but to make sure that everyone has the right to own one... or two...
I kind of like the Swiss way of thinking..., unless you're some kind of deviant, it's your duty to own one.
In Switzerland it is mandatory! Let's arm every airline passenger before they get on a plane. An armed airliner is a polite airliner. No need for TSA now as they know we are all armed. They cantry to find a new job radiating people!
Tuco Benedicto Pacifico Juan Maria Ramirez
i saw my gold coins levitating this morning, could it be theyve created an advanced algo program for physical metals???
Aaahhhl Be Baaahck
How about hunter killer algos that go out and find the predators and whack!
They do it with submarines.
We could have nano second tribunals (robotic of course) that issue a warrant, send out the hunter killer and seal the deal. An hour or two later, FBI knocks on your door.
OK, maybe I've read too much Philip K. Dick.
I like it...maybe Aaahhnold could star...hear he's got a lot of time on his hands these days
Not to sound like a heretic, but stop running has been an 'art' for over 100 years. If you have to put in stop losses that close to a trade point, you're probably overleveraged and 'BETTING" bigger than you should
Tyler,
These crocodile algos are almost certainly deployed to create leverage on options positions. Physical shares mean nothing. They are tools used to pump option values. The HFTs go home flat every night, as I understand it, after taking absurd percentage gains on their options positions.
Zero credibility market.
I call them trigger vultures. Very good. Those are the algo dujours lately. Right now they seem to pick a random poor bastard ticker with some volume behind it, and run the bids up and down searching for the triggers, once one trips, you know the rest. That is why stocks are crashing up.
See, NFLX, that's how you close that gap, run the shorts off, by triggering covers.
It's hard to imagine these algos harvesting anything more than the retail trade...
Ode to gold
------------
by Herr Frankenstein
Put the Rothschilds in the slammer.
Put the Rothschilds in the clink.
They have stolen enough money,
to push mankind to the brink.
They created our system
of fake paper backed by nil.
Benny's bucks be held in disdain,
since a printer needs no skill.
Therefore gold is the solution.
It's the antidote to theft.
We're on the eve of revolution.
Buy it now till nothing's left.
edit...ABCB EFGF HIHI bravo
This market is in need of some serious medical attention -
Paging Dr. Moe, Dr. Larry, Dr. Curly . . .
They must have access to quiet a lot uf stop loss data to set this program up. We give them this info each and every time we trade. Maybe we should not be so transparent!
that's just it...they don't...that's why the bots seek them out...if you set stops then you're showing your hand...if you buy puts then you're showing your hand...
you can ride these...via watching the narrowing bid/offer.
This is the reason I do my stops in my head and don't put them in the system. As others have pointed out, this is nothing new except for the speed. Here, a human has the advantage of not noticiing, where your slower broker's computer gets it and trips. So, don't do that. Of course, this means I'm watching all my open trades all day every day, tick by tick...so? Makes me feel like I'm earning the money instead of taking candy from babies dumb enough to think this is "set and forget".
you might try setting your stop as a trap-- set a buy just above your stop loss-- buy the dip
As long as you can cancel your stop loss when your buy is hit.
It could be worth keeping stink bids on likely targets. A few years ago during the infancy of the PM run, CDE-N was hit like this all the time. You just kept stink bids about 20% below the trading price and every so often it would get hit as someone went after a massive stop-loss.
That's a good idea. One option I use is make it a conditional stop if your broker allows it. So that the underlying stock or future has to hit a price before your order is placed.
people bought as a call option but forgot you can lose your whole premium?
it wasn't easy to pick a target...unless of course you know what you're looking for
http://www.youtube.com/watch?v=bnSvzvj9uec&feature=player_detailpage
I remember when they hit hard trading in the market about 4yrs back, small/medium brokers got wiped from HFT bids. It's just that they couldn't compete with flash trades.
But then may 6th 2010 came around. The HFT's will crash the system again, just a matter of time. Now there trades are hitting commod markets, FX is a mess with them. If I see an overbid to fast too soon, I am going fix puts on a downside wipeout.
...but i aint touching the aud overbid, yet. should go parabolic on usd deathroes, when the export/import trade markets go chaotic. short around about then. timeframe? f*ck knows, maybe 1mth or so
If this is a loss-finding algo, it's running backwards! The second peak should be higher than the first; the second low should be lower than the first.
Exactly! Seems like the second cycle would be useless to the programer(s) as the stops would have been triggered in the first cycle. The sine wave would be increasingly larger: looking for stops it missed in previous cycles, until the a crash up or down occured, or it determined the price to continue looking exceeded the expected pay-out. If the second cycle is smaller, seems like that would require capital spent with no chance of profit. Why do that? It is searching previously covered ground.
Could we be seeing a curve resulting from two competing/overlapping algos?
double post
At least the actual trades appear to be between the bid and ask prices, unlike the nat gas and crude algos, where the trades happened way outside the trading range. Seemed like a dead-giveaway that the whole thing was rigged. Are they getting more careful?
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