Behind One Big Order and Thousands of Small Ones at The Speed Traders Workshop 2012 New York City
Edgar Perez, Author, The Speed Traders, Speaker at The Speed Traders Workshop 2012 New York (http://www.thespeedtradersworkshop.com), How Algorithmic and High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Options, Futures and FX, September 25
- New York, NY (1888PressRelease) September 21, 2012 - A single large sell order in the benchmark European Brent oil market, followed by an abrupt U-turn among high-frequency traders, may have caused one of the most abrupt price routs ever, brokers and analysts conceded to Reuters. Edgar Perez, author of The Speed Traders, and former McKinsey & Co. consultant and New York University Adjunct Professor, will add some more light at The Speed Traders Workshop 2012, How High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Options, Futures and FX (The Speed Traders Workshop 2012), in a number of cities around the world, including New York, Chicago, Dubai, Jakarta, Shanghai and London.
Assuming a single seller got the ball rolling lower, it was algorithmic traders that almost certainly extended and intensified the decline, causing a 20-fold spike in volume as risk limits or automated price triggers fueled selling. Prices fell moderately at first, with Brent crude dropping by just 98 cents over the first three minutes. But the sell-off intensified over 46 seconds after 13:53:56 p.m., at which point market-makers may have been forced to liquidate.
Separately, several broker sources said the sell-off originated in the Brent market. "This created what the CFTC has described in the past as a 'hot potato' event, where the position was rapidly passed on in a way that looks very similar to the equity market 'flash crash' in May 2010."
Talk of more nefarious causes was deemed highly unlikely. High-frequency firms rarely initiate big one-off trades. A mistaken trade execution would likely have provoked an immediate rebound as the seller scrambled to buy back positions. "Based upon our initial review, it does not appear that a fat finger is the likely cause of the oil price dive yesterday," CFTC commissioner Bart Chilton said in an interview. "We have been poring over the data."
Unlike five years ago, when the constant human chatter of the New York oil trading pit would likely have pinpointed a culprit in short order, oil markets are now traded almost wholly electronically, further disguising the participants of a notoriously secretive and opaque marketplace.
The Speed Traders Workshop 2012 New York promises to reveal how high-frequency trading players are succeeding in the global markets and driving the development of algorithmic trading at breakneck speeds from the U.S. and Europe to India, Singapore and Brazil. The Flash Crash, the suspended BATS IPO, the botched Facebook IPO and Knight Capital's trading malfunction are just a few of the events in the history of high-frequency trading that will be dissected at The Speed Traders Workshop 2012.
Who should attend? Anybody involved with Algorithmic Trading, Automated Trading, Commodities, Commodities Trading, Credit Derivatives, Dark Pools Trading, Data Monitoring / Analysis, DMA Analysts, Derivatives Trading, Electronic Execution, Electronic Trading, Equity Trading, Exchange-Traded Instruments, Family Offices, Financial Engineering, Fixed Income / Currencies Trading, Futures, Hedge Funds Traders and Managers, High-Frequency Trading, Information Technology, Institutional Investors, Investment Banking, Market Makers, Operations, Options, Over-the-counter Derivatives, Portfolio Management, Proprietary Trading, Quantitative Trading, Regulatory Entities, Risk Management, Analysis and Control, Statistical Arbitrage, Structured Products Hedging and Trading Technology.
The Speed Traders Workshop 2012 is produced by Golden Networking (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs and investors. Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to info ( @ ) goldennetworking dot net.
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