For this blog posting, read the Interactive Session:Organizations, The Flash Crash: Machines Gone Wild, on pages 439-440. In a detailed response, answer questions 1-4 on page 440.
1- Describe the conditions that preceded the flash crash.
What happened on May 6th, 2010, the U.S. Stock markets were already down and trending even lower. Concerning about European debt, primarily the possibility of Greece defaulting, added to existing investor uncertainties about the markets and the economy at that time. I think before the flash crash the market is plunge so fast and so deep that it could not have been motivated by investor uncertainty alone. And the debt in European countries. I think from my understanding no one will know about flash crash, because some time the stock market suddenly go down and it goes fast. ------------------
2- what are some of the benefits of electronic trading?
A confluence of forces was unleashed by the structural and organizational features of the electronic trading systems that execute the majority of trades on Dow and the rest of the world's major stock exchanges. Electronic trading system offer considerable advantage over human broken, including speed, reduced cost, and more liquid market. I think it will make it easy to get stock trading online, by buying and selling the stock fast. and it's easy to use it any where. also I think it's ease of access anywhere, and it will be convenience for many people. ------------------
3- what features of electronic trading and automated trading programs contributed to the crash?
High frequency traders have taken over many of the responsibilities once filled by stock exchange specialists and market makers whose job was to match buyers and sellers efficiently . it contributed to the crash if where a computer algorithm is insufficient to handle the complexity of the event in progress, electronic trading system have the potential to make a bad situation much worse. ---------------------
4. Could this crash have been prevented? Why or why not?
Regulators are considering several different approaches to preventing future flash crashes, but it may be that there is no satisfactory solution. The securities and exchange commission (SEC) may attempt to standardize circuit breakers across all financial market, limit high frequency trading, overhaul the stub quoting system, or stipulate that all buy and sell orders be limits orders, which places upper and lower limits on the prices at which places upper and lower on the prices at which stocks can be bought and sold. on my opinion the crashes will never been prevented because no one know about it like what happened on May 6, 2010. everything will go down fast.
1- Describe the conditions that preceded the flash crash.
ReplyDeleteWhat happened on May 6th, 2010, the U.S. Stock markets were already down and trending even lower. Concerning about European debt, primarily the possibility of Greece defaulting, added to existing investor uncertainties about the markets and the economy at that time.
I think before the flash crash the market is plunge so fast and so deep that it could not have been motivated by investor uncertainty alone. And the debt in European countries.
I think from my understanding no one will know about flash crash, because some time the stock market suddenly go down and it goes fast.
------------------
2- what are some of the benefits of electronic trading?
A confluence of forces was unleashed by the structural and organizational features of the electronic trading systems that execute the majority of trades on Dow and the rest of the world's major stock exchanges. Electronic trading system offer considerable advantage over human broken, including speed, reduced cost, and more liquid market.
I think it will make it easy to get stock trading online, by buying and selling the stock fast. and it's easy to use it any where.
also I think it's ease of access anywhere, and it will be convenience for many people.
------------------
3- what features of electronic trading and automated trading programs contributed to the crash?
High frequency traders have taken over many of the responsibilities once filled by stock exchange specialists and market makers whose job was to match buyers and sellers efficiently .
it contributed to the crash if where a computer algorithm is insufficient to handle the complexity of the event in progress, electronic trading system have the potential to make a bad situation much worse.
---------------------
4. Could this crash have been prevented? Why or why not?
Regulators are considering several different approaches to preventing future flash crashes, but it may be that there is no satisfactory solution. The securities and exchange commission (SEC) may attempt to standardize circuit breakers across all financial market, limit high frequency trading, overhaul the stub quoting system, or stipulate that all buy and sell orders be limits orders, which places upper and lower limits on the prices at which places upper and lower on the prices at which stocks can be bought and sold.
on my opinion the crashes will never been prevented because no one know about it like what happened on May 6, 2010.
everything will go down fast.
Good. Full credit.
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