Australian Stocks Suffer HFT Stop-Run Glitch At Open

We are now entirely used to the daily mini-flashes in US equities as algos lose their stabilizer and run one way or another. Recently we noted the same algos-gone-wild had hit the India stock exchange. Tonight, the HFT-bug has moved to Australia, where the open – which just happens to be option expiration – saws a number of major equities (including several of the banks – e.g. ANZ and CBA) get smashed instantaneously higher (by 5-7%) at the open – only to plummet back to normalcy soon after. The culprit – it would appear to us – is a market-clearing wipe-out of all resting stops above the multi-year highs that the stocks were at the edge of. Regulators are ‘investigating’ though their first comment was “it is certainly nothing to do with the trading system.” As the Sydney Morning Herald notes a market participant: “Either that or an algorithm has gone haywire, a mistake has been made, or these trades are deliberate.’ Either way, do we have an orderly market?”


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