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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Press Release: Error Trade in DIST triggers Market Halt

Press Release: Error Trade in DIST triggers Market Halt

+23
WildBear
seyon
bliss
godswen
rijayasooriya
wallstreetguy
Rajaraam
chamith
insidertrader
mono
UKboy
monash
dhanurrox
smallville
Kumar
Deva
sapumal
dewminigamlath
charith82
Universalgoal
Kithsiri
aj
light
27 posters

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light

light
Senior Equity Analytic
Senior Equity Analytic

http://www.cse.lk/cmt/upload_cse_announcements/4731322209186_.pdf

aj


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Wow, 120,000 can halt the market. Is CSE really a stock market?

Now there is "a reason" for the downturn. Smile Blame everything on the transaction.

Kithsiri

Kithsiri
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

aj wrote:Wow, 120,000 can halt the market. Is CSE really a stock market?
The truth will never be known. Shocked

Universalgoal


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

or ho thats the reason for down fall verry funny i think sec and cse to be revamp these bawll heded peaple must chase away and revamp

light

light
Senior Equity Analytic
Senior Equity Analytic

"The CSE will be conducting an inquiry into this error trade."

Anyone knows what that mean in SEC's language? Razz

charith82


Manager - Equity Analytics
Manager - Equity Analytics

he he this is CSE. They always act like this. They may really shame to say Asia's number one stock market halted due to 5% down of MPI. So they are trying to hide. If 120,000 can change 5% of MPI they had to halt market every day within last month Razz Poor CSE

dewminigamlath


Manager - Equity Analytics
Manager - Equity Analytics

What is meant by an error trade anyway...?

sapumal


Vice President - Equity Analytics
Vice President - Equity Analytics

මේ බූරු බ්‍රෝකස්ලට මොලේ කල්පනා කරලා වැඩක් හරියට කර ගන්න බැහැනේ. credit ඉන්න කෙනෙක්ට කීයක් හරි දීල මේ වැඩේ ගේමක් නැතිව කර ගන්න තිබුනනේ.

dewminigamlath


Manager - Equity Analytics
Manager - Equity Analytics

If entire market is considered, DIST has a market cap % of 2.00% (@ Rs.144 per share). So, when a trade occurs at Rs.100 instead of Rs.144, this % would drop by about 1/3, i.e. about 0.66% drop.
However, since the MPI consists of only 25 companies, the drop would be much higher. This appears to be the reason for 5% drop.

Deva


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

If CSE consists of such an ignorant lot, what would be the future of CSE?

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

This is possible.
They call as 'Fat Finger' Trading Error.
Please read below, which happened couple of years ago in American Stock Exchange.

Posted in: Business
The Search Continues For Possible $16bn 'Fat Finger' Trader
2 years ago

It's was simply the most dramatic few minutes in equities trading ever. Market professionals with decades of experienced were transfixed, as the Dow Jones Industrial Average fell almost 1000 points and recovered around 700 in just a matter of minutes during late afternoon trading Thursday.


Shares in Procter & Gamble appeared to fall from $60 to $39.37 and back up again in minutes. And the stock in other big US companies made equally dramatic moves. Accenture shares opened at $41.94, were recorded as falling as low as 1 cent, and then closed at $41.09. One trader told Here Is The City: 'These moves were just jaw-dropping. We were so transfixed by though, that we didn't even have time to panic. By the time most of us had realised what had occurred, the market had rebounded'.


Quite what happened still remains unclear. US market regulator The Securities and Exchange Commission has launched a probe into the matter, while The New York Stock Exchange has said that there appears to have been no systems error and points to what it describes as 'a number of erroneous trades' which caused the extreme volatility. The Nasdaq, which is also undertaking a review to attempt to find out what happened, has confirmed that trades in some 286 securities which rose or fell by more than 60% during those few minutes of trading have been cancelled.

The theories are plentiful - panic selling (unlikely, as it all happened so quickly), programmed trading that fed on itself (possible), a systems glitch (plausible despite the early denials of problems), or a 'fat finger' trader. And it's the 'fat finger' trader theory that so far has gained most traction. The New York Post is reporting market speculation that 'a trader at Citigroup, seeking to place an order for 16 million shares in a miniature exchange that mimics the performance of the Standard & Poor's 500 index, accidentally keyed in an order for 16 billion shares of the securities, known on Wall Street as 'E-minis''. Citi, however, has come out and said that it has found 'no evidence' that the firm was behind any of the so-called 'erroneous trades'.

The Dow opened at 10,868.12 Thursday, and fell to an intra-day low of 9,869.62, before recovering to end the day at 10,520.32 - down 347.80 points (3.2%).

Sources - Bloomberg, CNBC, Reuters, The Financial Times, The New York Times
http://hereisthecity.com/2010/05/07/the_search_continues_for_possi/

Deva


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Kumar, I find it it difficult to understand the application of the American case you are referring to.
Yes, it could be possible if the trade consisted of a significant quantity (like the American stock market you refer - 16 Billion shares).
But in our case it's just 1,200 shares?



Last edited by Deva on Fri Nov 25, 2011 4:00 pm; edited 1 time in total

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics

I actually thought when I saw this news; WOW.. DIST is a powerful company that can bring the stock market down just by trading 1200 shares 40 rupees below the market price Wink

Lets say that we have 2000-3000 shares of DIST, so that means we can crash the market if we sell low rite?
afro

This is stupidity at max.. I can understand the indexes goin down, but I wonder who'se master mind it was to blame on the DIST trade???

lol! lol! lol! lol! lol! lol! lol! lol! lol!

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Deva wrote:Kumar, I find it it difficult to understand the application of the American case you are referring to.
Yes, it could be possible if the trade consisted of a significant quantity (like the American stock market you refer - 16 Billion shares).
But in our case it's just 1,200 shares?

The logic is simple if one valuable share start to tumble (particularly in bear market) then that leads panic mania in the trading floor. All other traders also start to panic.
These are happening in matter of second or minutes.
There are so many incidents in the past all over the stock exchanges.
Google and find please.
Please note I'm not defending CSE or SEC.
Posted the above post to say these were happened/are happening and will happen.

dhanurrox


Vice President - Equity Analytics
Vice President - Equity Analytics

It must have been done deliberately................

monash

monash
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

lol! WTf? this is BULLSHIT!!
no wonder why foreigners leave CSE. These bastards not even capable of managing a nursery. are these so called shameless sec officials at least passed grade 8? seriously even poor labors are intelligent than them..

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Market goes up, market goes down, markets crash, etc
All these things are not just happening at CSE. These can be happened at any market in the world.
Only thing is our market is still an immature market in terms of technical and regulations. so the % of happening these things may higher than a stable slow growing western markets.

Take it slow..!

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics

aj wrote:Wow, 120,000 can halt the market. Is CSE really a stock market?

Now there is "a reason" for the downturn. Smile Blame everything on the transaction.

you can do it with any stock market that has halting rules. for example if i sell 100 aapl at .2 usd that would dent the nasdaq considerably

insidertrader


Manager - Equity Analytics
Manager - Equity Analytics

There is a NEST 100 which upped the price by 7%. It's in the top 10 market capitalization list. This is probably bought by them to remove some redness in the market after the halt at 11:30. If you remove that 100 the final number should be much redder. Just an example. I think people have mentioned they used CARS, BUKI, SLT 100s like this frequently.

How tiny and few the CSE is and people cry against new listings.

chamith

chamith
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

mono wrote:
aj wrote:Wow, 120,000 can halt the market. Is CSE really a stock market?

Now there is "a reason" for the downturn. Smile Blame everything on the transaction.

you can do it with any stock market that has halting rules. for example if i sell 100 aapl at .2 usd that would dent the nasdaq considerably

i dont think that is the case. I think even if you put a sell at 2$ the order will be filled by the highest buy order. Today there must have been less DIST buy orders around 140. If some1 put a sell order at market price it would fill up all the buy orders starting from the highest till all sell out. Unfortunately final 100 or so orders must have been around 100 lkr.

Kithsiri

Kithsiri
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Here again the incompetency and lack of transparency are adding more fears to the already volatile market place which would put pressure to slide the indexes further down.

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics

Kithsiri wrote:Here again the incompetency and lack of transparency are adding more fears to the already volatile market place which would put pressure to slide the indexes further down.

lets face it that trade saved the market

monash

monash
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

didn't you guys see the other side of this trade?
i just checked my system. This 1200 DIST trade happened @ 10.57am. can you remember before this trade done, ASI and MPI already down more than 2%. If i'm not mistaken MPI down nearly 3% at around 10.45. from the start of market they tried to keep ASI and MPI up by pushing CARS and BUKI up. But that attempt was failed as sellers keep on hitting their buy orders. So they ran out of options and only option they had was halt the market. This might have done to trigger more panic on sellers to get MPI down by decreasing the remaining 2-3 %.

So i think this was done intentionally to halt the market to prevent that crash. Because if market continued to crash at the rate before halt, then ASI would end up around 5500 Razz Very Happy

Rajaraam


Vice President - Equity Analytics
Vice President - Equity Analytics

aj wrote:Wow, 120,000 can halt the market. Is CSE really a stock market?

Now there is "a reason" for the downturn. Smile Blame everything on the transaction.

That is why ppl say our SEC and CSE are not capable enough to perform their duties.

wallstreetguy


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Google Flash Crash. You will get an idea. This has happen in the states recently

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