There appears to no depth too low for Fearless Fleming to sink...
Either of the two articles quoting Fleming in Friday's G&M should bring his values and competence into question; taken together they are stunning. He displayed arrogance in blaming traders for 'worrying' about losing their jobs, when the real fight was over ethical issues arising from automating. (More later) His second article telling little shareholders to 'sit down and shut up' was boot-licking and toadying to the banks of the first water. There is no question who's grinding the organ for his dancing. He must really be worried about his job to be so brazen. What on earth is the president of the TSE doing commenting on the internal affairs of listed companies? Is he expressing TSE policy? Quite the contrary--the TSE recently released a report on public governance that specifically endorses some of the reforms some of the 'gad-flies' have been proposing. I hope the Board is taking notice of Fearless' bizarre behaviour and will do what is necessary.
Thanks everybody who had a thought for me getting through Friday with Ballard. Mercifully it closed above $160, so I was able to duck the huge risk I had by being short the March 160 (hey, and 150 and 140) puts. Things look a little more rational now, but as I said before, I've never traded a stock as volatile and thin as this, so it's going to be an on-the-job education. I sure hope they decide to split this thing at the AGM in May. Implied vols have understandably ballooned to
58/60 (although out month call vols are lower, largely because they're so big in absolute dollar terms).
The action in BCE in the last few minutes on Friday that Dave mentioned was just the latest example of what is the fundamental flaw of automated trading systems (when they are working). I printed out a copy of previous trades in the last two minutes to do a little 'forensic accounting'. (Are you still there, Myron? That was for you). At 3:59 100 shares traded at $55.85, then a 'program' trade of 4000 shares drove the price down to 55.50, then two more 'program' orders drove the price down to 55.10 in a matter of seconds. This had nothing to do with BCE options--program trades are allowed only in conjunction with an off-setting TXF/TXO/TIP trade. I didn't look to see what had been done there, but this jerking around with one of the heaviest-weighted stocks in the index is unconscionable. This is the major flaw in automation: it specifically eliminates what's known as continuous price-discovery and disclosure. In an open-outcry system, there is always someone responsible for conducting an orderly market, bringing buyers and sellers together, and ensuring that trades occur at representative prices. No computer program, no matter how well-written, can take the place of a human being who can reason, think, react and be held accountable. In fact, the Torex did exactly what it was supposed to do with the BCE orders on Friday, and that's the problem. And, these are the same people who are well down the road to bringing automation to derivatives, where price discovery and negotiation are paramount. Fairness and equity are being sacrificed for expediency and money, and this truly saddens us. In my opinion, the new system is being stacked so overwhelmingly in favour of the (bank-owned) big brokers that as soon as the investing public gets a taste of it, they will vote with their feet and completely abandon our markets for those that preserve the fairness of open-outcry auction markets.
Enough for today.
Happy trading.
Porter |
