Sunday, April 26, 2009

The WTF Hour.

Interesting piece that may explain why the last hour or so of trading has been so volatile.

2 comments:

mvw said...

"Mr. Madhavan estimates that if a market index moves 15% in a day, leveraged ETFs could constitute 75% of all volume at the close of trading"

Wow, that is very intense. I'm not sure how to feel about this. On one hand it gives traders like us opportunities that would have not existed otherwise, and on the other it's creating inefficient, untrustworthy (not to mention deadly) market conditions.

:/

mvw said...

One more thing, I've heard old timers talk about when the ES moved an average of 10 points a day. Can you imagine how trading in that kind of environment? Talk about chop shop.