Is The Rambus HFT Fat-Finger A Precursor Of Things To Come?
An intersting take on the recent violent move in Rambus stock, which may be explainabe by quirks in the HFT matrix, from Dennis Dick of Bright Trading. HFT Market Making May Lead to a Crash Rambus (RMBS) fell 30% today in a matter of five minutes. It immediately bounced back. The cause for this move was speculated as a trader with a “fat finger”. A trader simply messed up and sold too much stock accidentally, causing a swift and violent sell-off. The trades were later deemed erroneous and busted by the exchange. But what if the real cause wasn’t just a trader with a “fat finger”, accidentally selling too much stock? What if it was something more serious? I believe it is. I believe the real cause for this move is a major concern for our markets. The real cause may have been high frequency market making gone bad. Let me explain. Market making is the practice of quoting both bids and offers on the same security, in hopes of capturing the spread. Market making has existed in our markets si
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- Is The Rambus HFT Fat-Finger A Precursor Of Things To Come?
