March 28, 2012

BATS Crash and Amazon Book Price War

What do last weeks BATS crash and Amazon book price war have in common?

The BATS crash affected not only BATS’s IPO but also Apple stock for 5 minutes.

There are conspiracy stories being floated regarding BATS crash e.g. per ZeroHedge and Nanex 
What happened is that a malicious, 100% intentional Nasdaq algorithm purposefully brought BATS stock to a price of 0.00 within 900 millisecond of the company's break for trading! This is open SkyNet warfare.

But perhaps the only cause of BATS crash was a poorly designed algorithm and system (and no NASDAQ vs BATS Skynet wars) - a system/algorithm that was not tested properly for all the real-world conditions.

The BATS crash appears very much like the book price algorithm wars on Amazon where a book got priced at $23.6 million because two (poorly designed) pricing algorithms were trying to outdo each other with no relation to reality.

Tags: cause of BATS crash, BATS crash theory, algorithm price wars, BATS crash and Amazon, BATS vs NASDAQ wars, algorithm wars, HFT trading wars, poorly designed trading algorithms