Apple stock hit by brief mini crash of over 6 percent before rebounding

Posted:
in AAPL Investors edited January 2015
Apple shares on Monday saw its most precipitous decline in three months after opening to unusually high trade volume, shedding as much as $40 billion in market value before rebounding to end the day down more than three percent.


Source: Bloomberg


Shares of AAPL opened the day at $118.76 and hit a low point of $111.27 just before 9:51 a.m. Eastern after a furious minute of trading that saw the stock dip 3 percent. Over 6.7 million trades were conducted over the short one-minute period, reports Reuters. Trading ranged from $111.27 to $119.25, while Apple ended the day at $115.10 with a $675 billion market cap.

While the exact cause of AAPL's brief "mini crash" is unknown, stock market experts believe high frequency trading algorithms were triggered earlier today, the publication says.

"When you see that kind of price action that is simply algos running stocks," said Steve Hammer, founder of HFT Alert, a firm that monitors algorithmic trading.

According to Hammer, trade volume of some 300 stocks spiked shortly after markets opened, an indication of larger holdings firms initiating sell programs. By the closing bell, nearly 85 million shares of AAPL had switched hands compared to a three-month average volume of 58.6 million.

Other market analysts, however, say blaming HFT at this time is a bit premature and not representative of complex market dynamics. For example, tumbling commodity shares like oil may have spurred traders to sell off Apple and other holdings to free up liquidity.

Apple stock recently reached a milestone when its market capitalization breached $700 billion last week, jumping more than $40 billion in two weeks of trading.
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Comments

  • Reply 1 of 35
    hill60hill60 Posts: 6,992member

    Automated algorithms.

     

    image

  • Reply 2 of 35
    apple ][apple ][ Posts: 9,233member
    A three month low?


     


    That's not accurate.


     


    The lowest AAPL went today was $111.27 during the flash crash, and the lowest AAPL has been in the past three months was $95.95 around the middle of October.
  • Reply 3 of 35
    apple ][apple ][ Posts: 9,233member

    There's been plenty of guessing and speculation as to the exact reason for the sell off.

     

    One interesting explanation that I read had something to do with big traders needing to meet margin calls on tumbling oil, and they sold off AAPL to raise some funds.

  • Reply 4 of 35
    rogifanrogifan Posts: 10,669member
    How is it that Microsoft was up almost 2% today when most tech stocks were in the red? Is Satya Nadella getting the benefit of the doubt Tim Cook never got after Steve Jobs died?
  • Reply 5 of 35
    apple ][apple ][ Posts: 9,233member
    Quote:

    Originally Posted by Rogifan View Post



    How is it that Microsoft was up almost 2% today when most tech stocks were in the red? Is Satya Nadella getting the benefit of the doubt Tim Cook never got after Steve Jobs died?



    They say that retail was down this Black Friday, but maybe MS is immune and they're selling tons of Surfaces?

     

    I am only joking of course, and I bet you that Apple's going to have a killer holiday season. Apple is super strong now, flash crash or not.

  • Reply 6 of 35

    the vast majority of stock trades on HFT. The reporting of stock prices for decades have been worthless indicators of anything, including the value and quality of a company. It's been technical trading for 40 years, based upon psychobabble theories. The psychobabble has now been incorporated into psycho-algorithms (psychorithms). But, it's still babble. 

  • Reply 7 of 35
    Quote:

    Originally Posted by Rogifan View Post



    How is it that Microsoft was up almost 2% today when most tech stocks were in the red? Is Satya Nadella getting the benefit of the doubt Tim Cook never got after Steve Jobs died?



    Because no investment firm has any Microsoft stock anymore? 

    You can't sell if you don't own any. 

  • Reply 8 of 35
    I don't like the way everyone's dependent on automated trading. That's been bamboozled before.
  • Reply 9 of 35
    jonljonl Posts: 210member
    Quote:
    Originally Posted by Apple ][ View Post

     
    A three month low?


     


    That's not accurate.


     


    The lowest AAPL went today was $111.27 during the flash crash, and the lowest AAPL has been in the past three months was $95.95 around the middle of October.


     

    I actually got some at $95.08 in pre-market on Oct 21, and it would've been $94 or a wee bit less if I had realized sooner I was making my orders in the regular session area of Scottrade instead of the pre-market area. :mad:

     

    Quote:
    Originally Posted by Rogifan View Post



    How is it that Microsoft was up almost 2% today when most tech stocks were in the red? Is Satya Nadella getting the benefit of the doubt Tim Cook never got after Steve Jobs died?



    Ballmer left some big shoes to fill, but they were clownshoes. <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" /> His departure was seen as a great weight being lifted.

  • Reply 10 of 35

    The Stock Market: Based on nothing. Existing only to sustain the 1%

  • Reply 11 of 35
    mj webmj web Posts: 918member

    Cupertino sneezes, Wall Street say gesundheit! 

  • Reply 12 of 35
    Originally Posted by MJ Web View Post

    Cupertino sneezes, Wall Street says, How high?

     

    Fixed.

  • Reply 13 of 35
    apple ][apple ][ Posts: 9,233member
    Quote:

    Originally Posted by jonl View Post

     

     

    I actually got some at $95.08 in pre-market on Oct 21, and it would've been $94 or a wee bit less if I had realized sooner I was making my orders in the regular session area of Scottrade instead of the pre-market area. :mad:


     

    That's a pretty good price, at least for the past few months. I assume that you're still holding them?

     

    I think that some charts don't take into account pre/after market prices, so the chart that I was looking at probably falls under that category.

  • Reply 14 of 35
    irun262irun262 Posts: 121member
    It makes me simultaneously want to buy more shares (thinking the price will surely go up) and sell what I currently own (to avoid losing any more of their value).
  • Reply 15 of 35
    Today was rough for major indexes. Not sure this is actually true but as an observer and small-time stakeholder, AAPL seems to move in the direction of the market overall but the swing in both directions more severe.
  • Reply 16 of 35
    mpantonempantone Posts: 1,651member

    Apple's beta is greater than that of the general market, but that can be pretty much said of any major issue. There's more volatility in an individual stock than an index comprised of hundreds of components.

     

    In today's world of automated trading and computer algorithms, it's a given than price volatility for any given stock will be more pronounced than the indices.

     

    Quote:

    Originally Posted by ddawson100 View Post



    Today was rough for major indexes. Not sure this is actually true but as an observer and small-time stakeholder, AAPL seems to move in the direction of the market overall but the swing in both directions more severe.



    The latter is not true, otherwise AAPL would basically track the major indices since gains and losses would balance each other out. Or more specifically, AAPL drops less than it rises.

     

    AAPL outperforms the S&P 500 and Nasdaq-100. That means their downward swings are less than their upward swings.

  • Reply 17 of 35
    malaxmalax Posts: 1,598member
    Quote:

    Originally Posted by Apple ][ View Post

     

    A three month low?


     


    That's not accurate.


     


    The lowest AAPL went today was $111.27 during the flash crash, and the lowest AAPL has been in the past three months was $95.95 around the middle of October.


     

    The article says "Apple shares on Monday saw its most precipitous decline in three months..."  It's the one-day decline that hasn't happened in 3 months, not the price level.  That's pretty clear from the text.

  • Reply 18 of 35
    apple ][apple ][ Posts: 9,233member
    Quote:

    Originally Posted by malax View Post

     

     

    The article says "Apple shares on Monday saw its most precipitous decline in three months..."  It's the one-day decline that hasn't happened in 3 months, not the price level.  That's pretty clear from the text.


     

    It's been changed.

  • Reply 19 of 35
    normmnormm Posts: 646member
    What happened is that, around 9:50am, $767 million of AAPL stock was sold in 30 seconds, the stock plunged by 5%, and the limit-down rules of the exchange kicked in, preventing trading below $111.27. If there hadn't been trades at this level, trading would have paused completely for 15 minutes. But there were trades, and the stock recovered somewhat.

    My cynical interpretation is that someone started this deliberately, selling a bunch of stock and setting off a chain reaction, and then bought back in at the down limit.
  • Reply 20 of 35

    Apple is all out, supporting Product RED. It even ensured that its stocks go into the Red for a bit.

     

    Then, as usual, Carl Ichan spoiled the party by buying more and more and propped up the value again!

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