Salam Tun Mahathir...
They came out with a preliminary findings on the event of May 6
hishamh said this...
"Interesting story - apparently when the Dow was coming down on Thursday, quite a few market players shut down their program trading on the NYSE, because they didn't want to make things worse.
What then happened was that trading got shifted to the alternative exchanges where volume was way lower and bid-ask spreads much wider, which meant that low volume buy/sell orders drove the massive price changes we saw.
In short, the exact opposite of what you would expect."
my response
bro hishamh
considering the fact that the HFT boys acts a liquidity provider on a daily basis.....their act of turning the system off could have lead to the sharp drop in liquidity.....
the fragmented market and low liquidity in ATS which is not linked in a consolidated manner via a market wide circuit breaker could also be another factor........
lets see how the US Sec deal with this...
my take they may want to introduce a "market-wide" circuit breaker rule to be implemented in the National Market Securities and all the respective ATS, Darkbooks, ETP's
Do read the SEC report above page 75-80......you'll notice that all the issues I raised in my previous post is now being considered as the Regulatory Responses by the US SEC and CFTC....
Wass
satD