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Author Topic: Question about flash-crashes that only last for a moment  (Read 815 times)
barbarousrelic
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December 21, 2011, 05:29:31 PM
 #1

I apologize if this belongs somewhere else -

Does anyone know why certain stocks will have moments where the trading price drops significantly, just for a moment, and then goes right back to where it was?

For example, yesterday, Tuesday the 20th, on this stock for SPY: (30 minute chart)



Looking at a 1-minute chart tells me that that entire drop occurred in less than one minute.

Someone told me that this is the "market maker" "pulling out the stops," implying that there is a person who arranges buys and sells who wants to punish people who have a lot of stop-sells on a certain stock, and who momentarily prevents higher-price buyers from being able to buy.

1. Is there a person consciously and actively doing this?
2. Why would he do this? Is there something bad about a lot of people having stop-buy orders in place?
3. Does/could this situation ever occur the Bitcoin markets? I imagine not since I don't think mtgox allows stop orders.


Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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RyNinDaCleM
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December 21, 2011, 05:59:45 PM
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Judging by the amount of movement, at the given price range, it looks like someone just cashing out.
The price only changed 2%

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December 21, 2011, 06:00:32 PM
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Correct me if Im wrong, but I think thats a large sell, that goes to the bottom, and is filled back up with buys in a short period..  

Or its a glitch..

Cheesy

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barbarousrelic
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December 21, 2011, 06:04:05 PM
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If it's due to a quick large sell, then how come the price is bid back up to exactly the original price within seconds?

If it does get bid back up so quickly within seconds, the person conducting their large sell lost tens of millions of dollars by not doing a limit sell and waiting 5 minutes for it to complete.


edit: And if this is a glitch, I have seen it happen probably 7-8 times in the past few years.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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December 21, 2011, 06:09:54 PM
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now Im thinking glitch..

Or a late order...


Im curious myself..

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Otoh
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December 21, 2011, 07:50:23 PM
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knowing next to nada about trading but how about if some manipulator did a giant sell order to flush out a bunch of sell stops because he was basically long & wished to spook them & then a few mili seconds later made equal or greater buy orders & maybe was betting with leverage on the price movements or wanted to see if he could trigger a large instant bot panic crash & buy back in lower if that happened

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