Just over a week ago, the Japanese stock market participants were stunned when stock orders amounting to a whopping $617 billion (yes Billion with a B) – more than the size of Sweden’s economy – were canceled for reasons still unknown in what was one of the biggest ‘fat finger’ trading errors of all time. Since then, US equity markets have suddenly become notably more volatile – and fallen significantly, VIX has seen odd intraday ‘spikes’, S&P futures saw the very odd ‘satan signal’, and USDJPY has suffered its worst losses in 3 years. This raises the question of whether US market microstructure is any better than Michael Lewis’ Flash Boys’ book describes.. (as we head into a bond market holiday, dismal liquidity, and a potential Black Monday), ‘That could absolutely happen here,’ Tabb Group’s Larry Tabb warns Bloomberg.
A week ago, this happened… (From Bloomberg)
At 9:25 a.m. Tokyo time, orders for shares in 42 companies totaling 67.78 trillion yen ($617 billion) were canceled, according to data compiled by Bloomberg from the Japan Securities Dealers Association. A representative at the organization wasn’t immediately available to comment.
The biggest order was for 1.96 billion shares of Toyota Motor Corp., or 57 percent of outstanding shares at the world’s biggest carmaker, for 12.68 trillion yen through an off-exchange transaction. Toyota declined to comment. Other stocks with scrapped transactions included Honda Motor Co. (7267), Canon Inc., Sony Corp. and Nomura Holdings Inc.
This post was published at Zero Hedge on on 10/11/2014.
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