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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (55982)	8/29/2015 12:59:42 PM
From: Graham Osborn	Respond to of 78753

My read was that the liquidity of ETF was once again overestimated. In some cases circuit breakers were hit and the shares just weren't tradable. That created a chain reaction whereby the ETF MMs just assumed they weren't liquid and stopped buying or low balled their offers. So even though the NAVs were much higher the ETFs couldn't make redemptions on all the stop loss orders except at significant discounts. It was a bit like after hours trading, the bid/ asks on the table just weren't real. It reminds me of Buffett's saying that Wall Street is a mechanism for transfer of wealth from the inpatient to the patient. Mechanisms (ETFs, stop loss orders, ETF derivatives) that were mass marketed for risk mitigation proved once again a wolf in sheep's clothing.

To: Elroy who wrote (55982)	8/29/2015 2:04:44 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78753

As far as Monday morning action is concerned, I think a convoluted issue with a) bad quotes and possibly whacky executions of very small volume. I don't recall now, if there were some trades. In stocks where I had limit orders open below my offer price. I do recall, never actually having seen a trade at around $50.XX for JPM, as this was one of the stocks I was watching in IB, but I did not have a bid out on that one. Since the stocks in question could have traded in one of the many exchanges, it's really hard to tell what exactly is happening when the market goes nuts.