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Another ‘flash rise’ due to algorithmic trading

October 4, 2013 0 Comments

radioshack

Tyler Durden over at Zero Hedge has posted an absolutely fascinating video showing the interacting trading algorithms that analyzed a newsfeed regarding Radio Shack financing plans and reacted accordingly:

News yesterday that Radioshack was planning to seek new debt financing in order to give suppliers more confidence – which in itself is kind of ironic that suppliers would find an even-more-levered company a better credit risk – sent the stock spiking higher by 10% in mere seconds as the machines took the headline and ran with it. Sanity was restored moments later as the stock hit the exchange limits and was instantly reverted back to unchanged. While

I’ve posted the video below. Note the time stamp on the animation — it’s measuring in milliseconds:

Be sure to read the rest of Durden’s article. ..bruce..

About the Author:

Webster is Principal and Founder at at Bruce F. Webster & Associates, as well as an Adjunct Professor for the BYU Computer Science Department. He works with organizations to help them with troubled or failed information technology (IT) projects. He has also worked in several dozen legal cases as a consultant and as a testifying expert, both in the United States and Japan. He can be reached at 720.895.1405 or at bwebster@bfwa.com.

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