Wednesday, October 27, 2010

Artificially Creating Market Volume

Wash Trading

An illegal stock trading practice where an investor simultaneously buys and sells shares in a company through two different brokers.

This increases the activity in the stock and gives the impression that "big news" is about to come out

Painting the Tape

The illegal practice in which traders buy and sell a specific security among themselves, creating the illusion of high trading volume and significant investor interest, which can attract unsuspecting investors who might then buy the stock and enable the traders to profit.

Wednesday, October 20, 2010

Oct 20 NYSE SPY "Mispricing"

Bloomberg:
NYSE Software Glitch Spurs $7.9 Billion Misprice in S&P 500 ETF

A system upgrade at Arca triggered what appeared to be a 9.6 percent plunge yesterday in an exchange-traded fund that tracks the Standard & Poor’s 500 Index, a drop that would have erased $7.9 billion from one of the most popular securities in the U.S. Data published by the electronic venue at 4:15 p.m. New York time showed the SPDR S&P 500 ETF Trust at $106.46, compared with its opening level of $117.74.

The prices were later voided and the closing price updated to $118.54, up 0.7 percent, exchange officials said.

Friday, October 15, 2010