Sudden 9% drop in Apple stock triggers temporary trading halt [u]

Posted:
in AAPL Investors edited January 2014


Trading of Apple was briefly halted on Wall Street Friday morning after the stock took a sudden and unexpected plunge of 9.4 percent.



Update: The culprit of the AAPL stock price drop has been linked to volatility caused by three erroneous trades from BATS' systems. BATS Global Markets Chief Executive Joe Ratterman announced that he was withdrawing his company's IPO after Friday's fiasco. The original price for the 6.3 million share IPO was set between $16 and $18 a share, but the stock ended the day down 99.76 percent to finish at $0.04. Apple shares leveled out and finished the trading day at $596.05, down 0.55 percent.



Just before 11 a.m., AAPL plunged to $542.80, down more than 9 percent in what The Wall Street Journal said was likely an accidental "fat-finger trade." Five minutes later, trading resumed at a price just under $600.



The temporary halt was triggered by orders placed through the BATS Global Markets, which were well below where Apple had previously been trading. Orders first came in at $551.66 and quickly dropped to $542.80.



BATS has been facing technical issues, as its website notes it is "actively investigating an issue." Issues in the exchange have apparently applied to symbols ranging from 'A' to 'BF.'



BATS relies on high-speed traders as its key clients, catering to trading firms that capitalize on nanosecond price changes. Coincidentally, on Friday the Journal revealed that the SEC has initiated a probe into rapid-fire trade firms, prompted by the "flash crash" of May 2010 when stocks fell and rebounded sharply within minutes.



[ View article on AppleInsider ]

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Comments

  • digitalclipsdigitalclips Posts: 15,203member
    I sincerely hope this was an accident!
  • fairthropefairthrope Posts: 249member
    Or the dividend payment doesn't come fast enough.



    That leads to my other explanation; one or some of hedge fund who owns the stock need cash, cold hard cash, very fast. And they sold a large chunk of AAPL to get it.



    I wonder what happen across the Atlantic that they will need money for? Or maybe somewhere in the U.S.?
  • tundraboytundraboy Posts: 1,433member
    If your profitability depends on how near your servers are to the exchange's servers (so you beat the other high speed traders to the punch) then this is no longer the type of trading the exchanges were designed for.



    These trading programs cheat by placing orders, taking a peak at the offers, then because they are fast enough, to cancel the orders in a blink of an eye if the price isn't right before the buy is executed. Or something to that effect. Conceptually, it's insider trading because you are privy to information that manual traders can't even take a glimpse at.



    And guess who's one of the biggest innovators, if no the biggest, in this type of trading? Yes! That giant vampire squid sucking on the face of humanity, Goldman Sachs.



    Whenever evil is being perpetrated in the financial world, Goldman Sachs is right smack in the middle of it.
  • shaun, ukshaun, uk Posts: 1,050member
    "The End-Time is Here - 2008 was God's last warning, 2012 is economic collapse & WW III"



    Rather ironic Google Ad to place on this thread.



    I hope the world doesn't end before the Olympics and the iPhone 5
  • solipsismxsolipsismx Posts: 19,566member
    In other news Apple investors set the world record for the number of people exclaiming "Oh shit!" at the same time.
  • syracusesyracuse Posts: 73member
    Quote:
    Originally Posted by Fairthrope View Post


    Or the dividend payment doesn't come fast enough.



    That leads to my other explanation; one or some of hedge fund who owns the stock need cash, cold hard cash, very fast. And they sold a large chunk of AAPL to get it.



    I wonder what happen across the Atlantic that they will need money for? Or maybe somewhere in the U.S.?



    Sounds like a "fat finger" or system error...Trades cancelled...



    BATS is having issues all morning with stock tickers that start with A or B...



    "Fast Money" trying to hype up news on a quiet day, don't listen to the "talking heads" on that show.
  • quinneyquinney Posts: 2,420member
    Quote:
    Originally Posted by tundraboy View Post


    If your profitability depends on how near your servers are to the exchange's servers (so you beat the other high speed trader's to the punch) then this is no longer the type of trading the exchanges were designed for.



    These trading programs cheat by placing orders, taking a peak at the offers, then because they are fast enough, to cancel the orders in a blink of an eye if the price isn't right before the buy is executed. Or something to that effect. Conceptually, it's insider trading because you are privy to information that manual traders can't even take a glimpse at.



    And guess who's one of the biggest innovators, if no the biggest, in this type of trading? Yes! That giant vampire squid sucking on the face of humanity, Goldman Sachs.



    Whenever evil is being perpetrated in the financial world, Goldman Sachs is right smack in the middle of it.



    Hey, they need to make a lot of money. Impunity is very expensive.
  • cvaldes1831cvaldes1831 Posts: 1,832member
    Quote:
    Originally Posted by syracuse View Post


    Sounds like a "fat finger" or system error...Trades cancelled...



    BATS is having issues all morning with stock tickers that start with A or B...



    "Fast Money" trying to hype up news on a quiet day, don't listen to the "talking heads" on that show.



    A decidedly inauspicious IPO for BATS.



    BATS says that they have resolved the issues for trading of symbols between A and BF, however trading of BATS shares have been halted until further notice. They opened lower than their IPO price of $16 per share.



    The problem wasn't specific to Apple although much of the media coverage has sensationalized the errant trade of AAPL without fully explaining the situation.



    Journalism is dead.
  • fairthropefairthrope Posts: 249member
    Quote:
    Originally Posted by syracuse View Post


    Sounds like a "fat finger" or system error...Trades cancelled...



    BATS is having issues all morning with stock tickers that start with A or B...



    Are you sure? Nothing goes boom around Canary Wharf or Wall Street that somebody need to cash out right now?



    (portfolio or fund goes boom of course, not the building)
  • anantksundaramanantksundaram Posts: 16,834member
    What a BATShit system of trading.



    They should simply shut down these low-lifes.
  • oldmacguyoldmacguy Posts: 151member
    CNBC had reported that it was a single 100 share trade.
  • apple ][apple ][ Posts: 7,906member
    AAPL hasn't been doing that great for these past few days.



    And that's after Apple announced the dividend and the incredible iPad sales figures.



    I think that Apple should have spread that news out and not mentioned both on the same day.
  • bigdaddypbigdaddyp Posts: 810member
    Quote:
    Originally Posted by OldMacGuy View Post


    CNBC had reported that it was a single 100 share trade.



    How the hell can a 100 share trade drive down a stock that much? Especially with Apples share price and volume?
  • drobforeverdrobforever Posts: 400member
    At this point, all the good news for AAPL has been revealed. Veteran traders (not investors) will be looking to take profit. Whether it'll go to $1000 after dropping at least 5-10% is not what those guys would worry about right now.
  • gqbgqb Posts: 1,934member
    Quote:
    Originally Posted by tundraboy View Post


    If your profitability depends on how near your servers are to the exchange's servers (so you beat the other high speed trader's to the punch) then this is no longer the type of trading the exchanges were designed for.



    These trading programs cheat by placing orders, taking a peak at the offers, then because they are fast enough, to cancel the orders in a blink of an eye if the price isn't right before the buy is executed. Or something to that effect. Conceptually, it's insider trading because you are privy to information that manual traders can't even take a glimpse at.



    And guess who's one of the biggest innovators, if no the biggest, in this type of trading? Yes! That giant vampire squid sucking on the face of humanity, Goldman Sachs.



    Whenever evil is being perpetrated in the financial world, Goldman Sachs is right smack in the middle of it.



    Wall Street ownership of Congress will keep an outright ban of high speed training from happening, but there is a solution that could be even better:

    Return to having a small tax (e.g. 1/4%) against each stock transaction. This is already done in most of the world.

    That means

    1) an automatic disincentive for the leeches who are gaming the system by put out thousands of micro-bids that test the market, and are the things that trigger these events.

    2) if you're serious about nat'l debt reduction (and not just a Norquistian anti government fanatic) this brings in a LOT of revenue with little or no pain to 99%.
  • mrstepmrstep Posts: 446member
    Quote:
    Originally Posted by tundraboy View Post


    If your profitability depends on how near your servers are to the exchange's servers (so you beat the other high speed trader's to the punch) then this is no longer the type of trading the exchanges were designed for.



    These trading programs cheat by placing orders, taking a peak at the offers, then because they are fast enough, to cancel the orders in a blink of an eye if the price isn't right before the buy is executed. Or something to that effect. Conceptually, it's insider trading because you are privy to information that manual traders can't even take a glimpse at.



    And guess who's one of the biggest innovators, if no the biggest, in this type of trading? Yes! That giant vampire squid sucking on the face of humanity, Goldman Sachs.



    Whenever evil is being perpetrated in the financial world, Goldman Sachs is right smack in the middle of it.



    Totally. Agree or disagree with the global warming stuff, but Goldman is right there trying to push the carbon tax credits stuff into law - oh, which they happen to have big investments in and stand to make tons of money on. Costs everyone else, again Goldman sitting there as the leeches bleeding everyone else dry. What a coincidence. (Sorry, I meant they are performing a vital service as a middleman taking money without doing anything useful.)
  • apple ][apple ][ Posts: 7,906member
    That messed up trade doesn't show up on AAPL Google, but it's definitely there, and it shows up on my trading software.



  • sierrajeffsierrajeff Posts: 366member
    Quote:
    Originally Posted by tundraboy View Post


    If your profitability depends on how near your servers are to the exchange's servers (so you beat the other high speed trader's to the punch) then this is no longer the type of trading the exchanges were designed for.



    These trading programs cheat by placing orders, taking a peak at the offers, then because they are fast enough, to cancel the orders in a blink of an eye if the price isn't right before the buy is executed. Or something to that effect. Conceptually, it's insider trading because you are privy to information that manual traders can't even take a glimpse at.



    +1x10^8.



    This is not trading based on an analysis of a company's prospects, or to invest in a promising industry or trade; this is nothing more than pointless manipulation of the markets (and other people's hard-earned investments) for the sake of skimming a little cream.
  • tomhayestomhayes Posts: 126member
    Shows just how made up the idea of stock trading is
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