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Strategies & Market Trends : Option Strategies
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To: THornsby who wrote (2259)2/25/2021 4:52:26 PM
From: Thehammer1 Recommendation

Recommended By
THornsby

   of 2591
 
When you consider that options are a derivative, it is no wonder they were hosed that day. The quote and execution systems couldn't handle the volume so data feeds were slowed. I recall looking at WMT and it showed down to about $20 / a share but you couldn't but it there because it had already bounced higher.

The option markets depend on that data being instantaneous.

Mt firm's systems worked extremely well but unless you get a confirm back on the trade - you don't have an execution.

As I recall there is a market report that shows all the prices throughout the day and we using that report to force executions on the following days.

I also remember that we made a lot of folks whole who were liquidated due to margin calls. It took more than a week to get back to normal. We had these wash trade accounts that balance to zero the end of every day. (theoretically. We used the exchange confirmation to net out those accounts. They were designed to be zero every night but they carried huge discrepancies for weeks.

The branch phone lines were jammed and many clients could not get through.

We had several really bad days as I recall before the trading "normalized". As I recall the broad based indexx options contributed to the problems.

We have come a long way from a technology perspective but the proliferation of derivative product, programmed trading and social media / crowd trading will bring issues no one ever dreamed of..
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