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Mysterious Alogrithm Was 4% of Trading Activity Last Week


Parsad
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But once these machines create a panic all they do is cancel the trades.  Kinda feels like heads they win, tails retail is not allowed to take advantage of it.

 

At some point, when you get significant panic selling in the ensuing rush after a large flash crash, you will not be able to cancel all of those trades.  Somebody is going to take a hit eventually (derivatives losses), and it won't be pretty. 

 

Markets in the short-term work on confidence and fear, and if you have fear for a prolonged period...such as after a flash crash were people become extremely risk averse...you could see widespread selling.  Cheers!

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