Bots Gone Wild (Again)

August 1st, 2012 by alyx · No Comments · fail, markets

Not the first time, and I doubt it’ll be the last, but the market had another ‘lil glitch this morning. This one fell on the doorstep of Knight Capital Group – in the form of a disruption that affected a wide variety of stocks. NYSE is canceling a multitude of trades in affected shares:

Only five of the six stocks have been named so far. The affected companies include: Wizzard Software [WZE, +22%], Quicksilver [KWK, +5.31%], E House [EJ, -7.01%], American Reprographics [ARC, +0.46%] and China Cord Blood +22.7%].

Electronic trading firm Knight Capital Group said Wednesday that a “technology issue” in its market-making unit had affected the routing of shares of about 150 stocks to the New York Stock Exchange, where abnormal volatility roiled the markets in early trading. Several market participants said the source of the problem may have been large orders meant to be filled throughout the day that were instead executed in a shorter time frame, with some saying it was handled in the first 15 minutes of trading.

“That has disrupted all the normal activities — stocks are moving all over the place, they are weird, they are trading like millions of shares, 100 shares at a time, so something went haywire somewhere,” said Stephen Massocca, managing director, Wedbush Morgan in San Francisco.

Up is down, cats and dogs living together, etc.

While I was looking into Wizzard (actually a podcast-hosting concern), I uncovered a band from the 1970s by the same name, and I can’t not share this gem with you:

(full disclosure: no position in puppets, ill-fitting skullcaps, eyeliner or upright bass)

Knight’s stock took a nearly 33% bitchslap on the day, with some in the options market expecting it to fall even further (unless that’s bot action too, who knows).

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