Flash-Crashed

Earlier this morning the British Pound suddenly found itself on the receiving end of a 6% flash crash during Asian trading hours. Some of the losses have been recouped since then, but that will be of little consolation to anyone who may have been long the GBP overnight.

 

london_ww2Oops.

Photo credit: Time & Life Pictures / Getty Images

 

Now before you strike this up to some ‘fat finger’ or bot driven irregularity let me remind you that cable is the third most liquid currency pair after the EUR and JPY crosses, representing roughly 15% of the daily trading forex volume of US$5 Trillion.

We are not talking gold or even the S&P here – this is (supposed to be) an extremely liquid market. Which means that this type kind of dislocation should not be happening assuming a semi efficient market. And as such it either reeks of manipulation or worse – an early sign that things are becoming unglued on the currency front.

 

1-poundingGBP-USD, 60 minute and daily chart. Overnight currency murder – click to enlarge.

 

What surprised me the most however was the complete lack of response on the equities side. There wasn’t as much as a twitch and it appears that the E-Mini has been dropped off at long term parking near lot number 2148.

A bit earlier this morning I was considering a neutral option strategy that leverages sudden volatility and it’s something I may be revisiting after consulting with Jay the options slayer. If nothing else it may offer us some level of protecting against these constant surprise spikes we keep seeing across the board.

 

2-spoosAn image from the spoo coma ward – 60 minute and daily – click to enlarge.

 

Charts by: Ninja Trader / Evil Speculator

 

Chart and image captions by PT

 

This missive by The Mole appeared originally at the Evil Speculator.

 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • No results available

Support Acting Man

Austrian Theory and Investment

j9TJzzN

The Review Insider

Archive

Dog Blow

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

Mish Talk

     
    Buy Silver Now!
     
    Buy Gold Now!