NYSE Arca , previously known as ArcaEx , an abbreviation of Archipelago Exchange , is an exchange on which both stocks and options are traded. It was owned by Intercontinental Exchange . It merged with the New York Stock Exchange in 2006 and now operates as a subsidiary of the NYSE Group, Inc. It is headquartered in Chicago .
100-513: Early reports indicated that NYSE Arca may have played a role in the 2010 Flash Crash . In November 1994, Stuart Townsend and Gerald Putnam founded TerraNova Trading LLC, an electronic securities exchange, in Chicago. Its product, Archipelago, started accepting trading orders on January 20, 1997. In 2005, Archipelago Holdings, the owner of ArcaEx, bought the Pacific Exchange , after what had been
200-474: A feedback mechanism that forces even more market makers out. This cascading effect has caused hundreds of liquidity-induced crashes in the past, the flash crash being one (major) example of it. However, independent studies published in 2013 strongly disputed the claim that one hour before its collapse in 2010, the stock market registered the highest reading of "toxic order imbalance" in previous history. In particular, in 2011 Andersen and Bondarenko conducted
300-517: A monograph or in the proceedings of an academic conference . If the identities of authors are not revealed to each other, the procedure is called dual-anonymous peer review. Medical peer review may be distinguished in four classifications: Additionally, "medical peer review" has been used by the American Medical Association to refer not only to the process of improving quality and safety in health care organizations, but also to
400-700: A 2011 op-ed in The New York Times a year after the Flash Crash, sharply critical of what they perceived to be the SEC's apparent lack of action to prevent a recurrence. In 2011 high-frequency traders moved away from the stock market as there had been lower volatility and volume. The combined average daily trading volume in the New York Stock Exchange and Nasdaq Stock Market in the first four months of 2011 fell 15% from 2010, to an average of 6.3 billion shares
500-517: A 36-year-old small-time trader who worked from his parents' modest stucco house in suburban west London for sparking a trillion-dollar stock market crash is "a little bit like blaming lightning for starting a fire" and that the investigation was lengthened because regulators used "bicycles to try and catch Ferraris". Furthermore, he concluded that by April 2015, traders can still manipulate and impact markets in spite of regulators and banks' new, improved monitoring of automated trade systems. In May 2014,
600-580: A Bloomberg, a printer, a fax, and three TVs on the wall with several large clocks. A better measure of the inadequacy of the current mélange of IT antiquities is that the SEC/CFTC report on the May 6 crash was released on September 30, 2010. Taking nearly five months to analyze the wildest ever five minutes of market data is unacceptable. CFTC Chair Gensler specifically blamed the delay on the “enormous” effort to collect and analyze data. What an enormous mess it is. Nanex ,
700-488: A CFTC report concluded that high-frequency traders "did not cause the Flash Crash, but contributed to it by demanding immediacy ahead of other market participants". Some recent peer-reviewed research shows that flash crashes are not isolated occurrences, but have occurred quite often. Gao and Mizrach studied US equities over the period of 1993–2011. They show that breakdowns in market quality (such as flash crashes) have occurred in every year they examined and that, apart from
800-478: A buyer; it never crossed the bid/ask spread. That means that none of the 6,438 trades were executed by hitting a bid. [...] [S]tatements from page 36 of Kirilenko's paper cast serious doubt on the credibility of their analysis. [...] It is widely believed that the "sell program" refers to the algo selling the W&;R contracts. However, based on the statements above, this cannot be true. The sell program must be referring to
900-477: A certain threshold, and effective peer review requires a certain level of expertise. For non-professional writers, peer review feedback may be overlooked, thereby affecting its effectiveness. Elizabeth Ellis Miller, Cameron Mozafari, Justin Lohr and Jessica Enoch state, "While peer review is an integral part of writing classrooms, students often struggle to effectively engage in it." The authors illustrate some reasons for
1000-616: A close working relationship since 2001. In 2006, ArcaEx merged with the New York Stock Exchange (NYSE) and the name was changed to NYSE Arca. On August 22, 2013, the Arca system sent multiple sequences to Nasdaq which overloaded the Securities Information Processor (SIP) caused by reconnection issues to Nasdaq. This in turn caused a chain effect reaction which led to the NASDAQ flash freeze . This article about stock exchanges
1100-417: A comprehensive investigation of the two main versions of VPIN used by its creators, one based on the standard tick-rule (or TR-VPIN) and the other based on Bulk Volume Classification (or BVC-VPIN). They find that the value of TR-VPIN (BVC-VPIN) one hour before the crash "was surpassed on 71 (189) preceding days, constituting 11.7% (31.2%) of the pre-crash sample". Similarly, the value of TR-VPIN (BVC-VPIN) at
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#17328553448761200-672: A day. Trading activities declined throughout 2011, with April's daily average of 5.8 billion shares marking the lowest month since May 2008. Sharp movements in stock prices, which were frequent during the period from 2008 to the first half of 2010, were in a decline in the Chicago Board Options Exchange volatility index, the VIX, which fell to its lowest level in April 2011 since July 2007. These volumes of trading activity in 2011, to some degree, were regarded as more natural levels than during
1300-422: A different algo, or Kirilenko's analysis is fundamentally flawed, because the paper incorrectly identifies trades that hit the bid as executions by the W&R algo. As of July 2011, only one theory on the causes of the flash crash was published by a Journal Citation Reports indexed, peer-reviewed scientific journal. It was reported in 2011 that one hour before its collapse in 2010, the stock market registered
1400-557: A fundamental process in academic and professional writing, serving as a systematic means to ensure the quality, effectiveness, and credibility of scholarly work. However, despite its widespread use, it is one of the most scattered, inconsistent, and ambiguous practices associated with writing instruction. Many scholars questioning its effectiveness and specific methodologies. Critics of peer review in classrooms express concerns about its ineffectiveness due to students' lack of practice in giving constructive criticism or their limited expertise in
1500-531: A given stock at a penny. A stub quote is essentially a place holder quote because that quote would never—it is thought—be reached. When a market order is seeking liquidity and the only liquidity available is a penny-priced stub quote, the market order, by its terms, will execute against the stub quote. In this respect, automated trading systems will follow their coded logic regardless of outcome, while human involvement likely would have prevented these orders from executing at absurd prices. As noted below, we are reviewing
1600-562: A joint report titled "Findings Regarding the Market Events of May 6, 2010" identifying the sequence of events leading to the flash crash. The joint 2010 report "portrayed a market so fragmented and fragile that a single large trade could send stocks into a sudden spiral", and detailed how a large mutual fund firm selling an unusually large number of E-Mini S&P contracts first exhausted available buyers, and then how high-frequency traders (HFT) started aggressively selling, accelerating
1700-417: A large fundamental trader (known to be Waddell & Reed Financial Inc. ) "initiated a sell program to sell a total of 75,000 E-Mini S&P contracts (valued at approximately $ 4.1 billion) as a hedge to an existing equity position ". The report says that this was an unusually large position and that the computer algorithm the trader used to trade the position was set to "target an execution rate set to 9% of
1800-465: A leading firm specialized in the analysis of high-frequency data, also pointed out to several inconsistencies in the CFTC study: Based on interviews and our own independent matching of the 6,438 W&R executions to the 147,577 CME executions during that time, we know for certain that the algorithm used by W&R never took nor required liquidity. It always posted sell orders above the market and waited for
1900-415: A longitudinal study comparing two groups of students (one majoring in writing and one not) to explore students' perceptions of authority. This research, involving extensive analysis of student texts, concludes that students majoring in non-writing fields tend to undervalue mandatory peer review in class, while those majoring in writing value classmates' comments more. This reflects that peer review feedback has
2000-408: A low of $ 3,217 a metric ton before rebounding quickly. The U.S. dollar tumbled against the yen on March 16, 2011, falling 5% in minutes, one of its biggest moves ever. According to a former cocoa trader: "The electronic platform is too fast; it doesn't slow things down like humans would." Peer review Peer review is the evaluation of work by one or more people with similar competencies as
2100-496: A means of critiquing each other's work, peer review is often framed as a way to build connection between students and help develop writers' identity. While widely used in English and composition classrooms, peer review has gained popularity in other disciplines that require writing as part of the curriculum including the social and natural sciences . Peer review in classrooms helps students become more invested in their work, and
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#17328553448762200-522: A number of critics stated that blaming a single order (from Waddell & Reed ) for triggering the event was disingenuous. Most prominent of all, the CME issued, within 24 hours, a rare press release in which it argued against the SEC/CFTC explanation: Futures and options markets are hedging and risk transfer markets. The report references a series of bona fide hedging transactions, totaling 75,000 contracts, entered into by an institutional asset manager to hedge
2300-434: A penny likely was attributable to the use of a practice called "stub quoting." When a market order is submitted for a stock, if available liquidity has already been taken out, the market order will seek the next available liquidity, regardless of price. When a market maker’s liquidity has been exhausted, or if it is unwilling to provide liquidity, it may at that time submit what is called a stub quote—for example, an offer to buy
2400-450: A portion of the risk in its $ 75 billion investment portfolio in response to global economic events and the fundamentally deteriorating market conditions that day. The 75,000 contracts represented 1.3% of the total E-Mini S&P 500 volume of 5.7 million contracts on May 6 and less than 9% of the volume during the time period in which the orders were executed. The prevailing market sentiment was evident well before these orders were placed, and
2500-611: A result of large traders seeking to buy or sell quantities larger than intermediaries are willing to temporarily hold, and simultaneously long-term suppliers of liquidity are not forthcoming even if significant price concessions are offered. Recent research on dynamical complex networks published in Nature Physics (2013) suggests that the 2010 Flash Crash may be an example of the "avoided transition" phenomenon in network systems with critical behavior. In April 2015, Navinder Singh Sarao, an autistic London-based point-and-click trader,
2600-551: A significant effect on regulatory proposals put forward to prevent another flash crash. According to Bloomberg, the VPIN metric is the subject of a pending patent application filed by the paper's three authors, Maureen O'Hara and David Easley of Cornell University , and Marcos Lopez de Prado , of Tudor Investment Corporation . A study of VPIN by scientists from the Lawrence Berkeley National Laboratory cited
2700-448: A time and given an amount of time to present the topic that they have researched. Each speaker may or may not talk about the same topic but each speaker has something to gain or lose which can foster a competitive atmosphere. This approach allows speakers to present in a more personal tone while trying to appeal to the audience while explaining their topic. Peer seminars may be somewhat similar to what conference speakers do, however, there
2800-502: A £50,000 bail with a full extradition hearing scheduled for September with the US Department of Justice. Sarao and his company, Nav Sarao Futures Limited, allegedly made more than $ 40 million in profit from trading from 2009 to 2015. During extradition proceedings he was represented by Richard Egan of Tuckers Solicitors . As of 2017 Sarao's lawyers claim that all of his assets were stolen or otherwise lost in bad investments. Sarao
2900-612: Is a stub . You can help Misplaced Pages by expanding it . 2010 Flash Crash The May 6, 2010, flash crash , also known as the crash of 2:45 or simply the flash crash , was a United States trillion-dollar flash crash (a type of stock market crash ) which started at 2:32 p.m. EDT and lasted for approximately 36 minutes. Stock indices, such as the S&;P 500 , Dow Jones Industrial Average and Nasdaq Composite , collapsed and rebounded very rapidly. The Dow Jones Industrial Average had its second biggest intraday point decline (from
3000-525: Is a type of engineering review. Technical peer reviews are a well defined review process for finding and fixing defects, conducted by a team of peers with assigned roles. Technical peer reviews are carried out by peers representing areas of life cycle affected by material being reviewed (usually limited to 6 or fewer people). Technical peer reviews are held within development phases, between milestone reviews, on completed products or completed portions of products. The European Union has been using peer review in
3100-479: Is common in the field of health care, where it is usually called clinical peer review . Further, since peer review activity is commonly segmented by clinical discipline, there is also physician peer review, nursing peer review, dentistry peer review, etc. Many other professional fields have some level of peer review process: accounting, law, engineering (e.g., software peer review , technical peer review ), aviation, and even forest fire management. Peer review
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3200-586: Is incorporated into the California Health and Safety Code Section 57004. Peer review, or student peer assessment, is the method by which editors and writers work together in hopes of helping the author establish and further flesh out and develop their own writing. Peer review is widely used in secondary and post-secondary education as part of the writing process. This collaborative learning tool involves groups of students reviewing each other's work and providing feedback and suggestions for revision. Rather than
3300-551: Is more time to present their points, and speakers can be interrupted by audience members to provide questions and feedback upon the topic or how well the speaker did in presenting their topic. Professional peer review focuses on the performance of professionals, with a view to improving quality, upholding standards, or providing certification. Peer review in writing is a pivotal component among various peer review mechanisms, often spearheaded by educators and involving student participation, particularly in academic settings. It constitutes
3400-413: Is still a method used in classrooms to help students young and old learn how to revise. With evolving and changing technology, peer review will develop as well. New tools could help alter the process of peer review. Peer seminar is a method that involves a speaker that presents ideas to an audience that also acts as a "contest". To further elaborate, there are multiple speakers that are called out one at
3500-432: Is that peer review is not just about improving writing but about helping authors achieve their writing vision." Feedback from the majority of non-professional writers during peer review sessions often tends to be superficial, such as simple grammar corrections and questions. This precisely reflects the implication in the conclusion that the focus is only on improving writing skills. Meaningful peer review involves understanding
3600-502: Is the only U.S. state to mandate scientific peer review. In 1997, the Governor of California signed into law Senate Bill 1320 (Sher), Chapter 295, statutes of 1997, which mandates that, before any CalEPA Board, Department, or Office adopts a final version of a rule-making, the scientific findings, conclusions, and assumptions on which the proposed rule are based must be submitted for independent external scientific peer review. This requirement
3700-450: Is the process of having a draft version of a researcher's methods and findings reviewed (usually anonymously) by experts (or "peers") in the same field. Peer review is widely used for helping the academic publisher (that is, the editor-in-chief , the editorial board or the program committee ) decide whether the work should be accepted, considered acceptable with revisions, or rejected for official publication in an academic journal ,
3800-399: Is used in education to achieve certain learning objectives, particularly as a tool to reach higher order processes in the affective and cognitive domains as defined by Bloom's taxonomy . This may take a variety of forms, including closely mimicking the scholarly peer review processes used in science and medicine. Scholarly peer review or academic peer review (also known as refereeing)
3900-537: The Chicago Board Options Exchange sent a message saying that NYSE Arca was "out of NBBO" ( National best bid and offer ). The Chicago Board Options Exchange, NASDAQ, NASDAQ OMX BX and BATS Exchange all declared self-help against NYSE Arca. SEC Chairwoman Mary Schapiro testified that "stub quotes" may have played a role in certain stocks that traded for 1 cent a share. According to Schapiro: The absurd result of valuable stocks being executed for
4000-408: The S&P 500 index) also down approximately 3%. Still lacking sufficient demand from fundamental buyers or cross-market arbitrageurs, HFTs began to quickly buy and then resell contracts to each other—generating a “hot-potato” volume effect as the same positions were rapidly passed back and forth. Between 2:45:13 and 2:45:27, HFTs traded over 27,000 contracts, which accounted for about 49 percent of
4100-633: The Washington Post Company 's shares were halted for five minutes after it became the first stock to trigger the new circuit breakers. Three erroneous NYSE Arca trades were said to have been the cause of the share price jump. On May 6, the markets only broke trades that were more than 60 percent away from the reference price in a process that was not transparent to market participants. A list of 'winners' and 'losers' created by this arbitrary measure has never been made public. By establishing clear and transparent standards for breaking erroneous trades,
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4200-467: The "Open Method of Co-ordination" of policies in the fields of active labour market policy since 1999. In 2004, a program of peer reviews started in social inclusion . Each program sponsors about eight peer review meetings in each year, in which a "host country" lays a given policy or initiative open to examination by half a dozen other countries and the relevant European-level NGOs . These usually meet over two days and include visits to local sites where
4300-478: The 2011 conclusions of Easley, Lopez de Prado and O'Hara for VPIN on S&P 500 futures but provided no independent confirmation for the claim that VPIN reached its historical high one hour before the crash: The Chief Economist of the Commodity Futures Trading Commission and several academic economists published a working paper containing a review and empirical analysis of trade data from
4400-542: The 404 New York Stock Exchange listed S&P 500 stocks. The first circuit breakers were installed to only 5 of the S&;P 500 companies on Friday, June 11, to experiment with the circuit breakers. The five stocks were EOG Resources, Genuine Parts, Harley Davidson, Ryder System and Zimmer Holdings. By Monday, June 14, 44 had them. By Tuesday, June 15, the number had grown to 223, and by Wednesday, June 16, all 404 companies had circuit breakers installed. On June 16, 2010, trading in
4500-538: The E-Mini was paused for five seconds when the Chicago Mercantile Exchange ('CME') Stop Logic Functionality was triggered in order to prevent a cascade of further price declines. In that short period of time, sell-side pressure in the E-Mini was partly alleviated and buy-side interest increased. When trading resumed at 2:45:33 p.m., prices stabilized and shortly thereafter, the E-Mini began to recover, followed by
4600-670: The Flash Crash. The authors examined the characteristics and activities of buyers and sellers in the Flash Crash and determined that a large seller, a mutual fund firm, exhausted available fundamental buyers and then triggered a cascade of selling by intermediaries, particularly high-frequency trading firms. Like the SEC/CFTC report described earlier, the authors call this cascade of selling "hot potato trading", as high-frequency firms rapidly acquired and then liquidated positions among themselves at steadily declining prices. The authors conclude: Based on our analysis, we believe that High Frequency Traders exhibit trading patterns inconsistent with
4700-845: The Journal of the Royal Society of Medicine. “That’s boring.” This is also particularly evident in university classrooms, where the most common source of writing feedback during student years often comes from teachers, whose comments are often highly valued. Students may become influenced to provide research in line with the professor’s viewpoints, because of the teacher’s position of high authority. The effectiveness of feedback largely stems from its high authority. Benjamin Keating, in his article "A Good Development Thing: A Longitudinal Analysis of Peer Review and Authority in Undergraduate Writing," conducted
4800-449: The SPY". After a short while, as market participants had "time to react and verify the integrity of their data and systems, buy-side and sell-side interest returned and an orderly price discovery process began to function", and by 3:00 p.m., most stocks "had reverted back to trading at prices reflecting true consensus values". A few hours after the release of the 104-page SEC/CFTC 2010 report,
4900-612: The United States National Market System for equity securities . The Reg NMS, promulgated and described by the United States Securities and Exchange Commission , was intended to assure that investors received the best price executions for their orders by encouraging competition in the marketplace, but created attractive new opportunities for high-frequency-traders. Activities such as spoofing , layering and front running were banned by 2015. This rule
5000-476: The Volume-Synchronized Probability of Informed Trading (VPIN) Flow Toxicity metric, which delivered a real-time estimate of the conditions under which liquidity is being provided. If the order imbalance becomes too toxic, market makers are forced out of the market. As they withdraw, liquidity disappears, which increases even more the concentration of toxic flow in the overall volume, which triggers
5100-429: The author's writing intent, posing valuable questions and perspectives, and guiding the author to achieve their writing goals. Magda Tigchelaar compares peer review with self-assessment through an experiment that divided students into three groups: self-assessment, peer review, and no review. Across four writing projects, she observed changes in each group, with surprisingly results showing significant improvement only in
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#17328553448765200-431: The classroom environment at large. Understanding how their work is read by a diverse readership before it is graded by the teacher may also help students clarify ideas and understand how to persuasively reach different audience members via their writing. It also gives students professional experience that they might draw on later when asked to review the work of a colleague prior to publication. The process can also bolster
5300-426: The confidence of students on both sides of the process. It has been found that students are more positive than negative when reviewing their classmates' writing. Peer review can help students not get discouraged but rather feel determined to improve their writing. Critics of peer review in classrooms say that it can be ineffective due to students' lack of practice giving constructive criticism, or lack of expertise in
5400-484: The day, the equity market began to fall rapidly, dropping an additional 600 points in 5 minutes for a loss of nearly 1,000 points for the day by 2:47 p.m. Twenty minutes later, by 3:07 p.m., the market had regained most of the 600-point drop. At the time of the flash crash, in May 2010, high-frequency traders were taking advantage of unintended consequences of the consolidation of the U.S. financial regulations into Regulation NMS , designed to modernize and strengthen
5500-472: The effect of the mutual fund's selling and contributing to the sharp price declines that day. The SEC and CFTC joint 2010 report itself says that "May 6 started as an unusually turbulent day for the markets" and that by the early afternoon "broadly negative market sentiment was already affecting an increase in the price volatility of some individual securities". At 2:32 p.m. (EDT), against a "backdrop of unusually high volatility and thinning liquidity" that day,
5600-531: The feedback with either positive or negative attitudes towards the text, resulting in selective or biased feedback and review, further impacting their ability to objectively evaluate the article. It implies that subjective emotions may also affect the effectiveness of peer review feedback. Pamela Bedore and Brian O’Sullivan also hold a skeptical view of peer review in most writing contexts. The authors conclude, based on comparing different forms of peer review after systematic training at two universities, that "the crux
5700-515: The financial crisis and its aftermath. Some argued that those lofty levels of trading activity were never an accurate picture of demand among investors. It was a reflection of computer-driven traders passing securities back and forth between day-trading hedge funds. The flash crash exposed this phantom liquidity. In 2011 high-frequency trading firms became increasingly active in markets like futures and currencies, where volatility remains high. In 2011 trades by high-frequency traders accounted for 28% of
5800-528: The financial crisis, such problems have declined since the introduction of Reg NMS . They also show that 2010, while infamous for the flash crash, was not a year with an inordinate number of breakdowns in market quality. On May 6, 2010, U.S. stock markets opened and the Dow was down, and trended that way for most of the day on worries about the debt crisis in Greece . At 2:42 p.m., with the Dow down more than 300 points for
5900-510: The first weekend, regulators had discounted the possibility of trader error and focused on automated trades conducted on exchanges other than the NYSE . However, CME Group , a large futures exchange , stated that, insofar as stock index futures traded on CME Group were concerned, its investigation found no evidence for this, or that high-frequency trading played a role, and in fact concluded that automated trading had contributed to market stability during
6000-540: The following days, helped by a bailout package in Europe to help save the euro. The S&P 500 erased all losses within a week, but selling soon took over again and the indices reached lower depths within two weeks. The NASDAQ released their timeline of the anomalies during U.S. Congressional House Subcommittee on Capital Markets and Government-Sponsored Enterprises hearings on the flash crash. NASDAQ's timeline indicates that NYSE Arca may have played an early role and that
6100-455: The government's technological capabilities and inability to study today's markets. Leinweber wrote: The heads of the SEC and CFTC often point out that they are running an IT museum. They have photographic evidence to prove it—the highest-tech background that The New York Times (on September 21, 2010) could find for a photo of Gregg Berman, the SEC’s point man on the flash, was a corner with five PCs,
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#17328553448766200-456: The highest reading of "toxic order imbalance" in previous history. The authors of this 2011 paper apply widely accepted market microstructure models to understand the behavior of prices in the minutes and hours prior to the crash. According to this paper, "order flow toxicity" can be measured as the probability that informed traders (e.g., hedge funds ) adversely select uninformed traders (e.g., market makers ). For that purpose, they developed
6300-460: The incident, the U.S. Department of Justice laid 22 criminal counts, including fraud and market manipulation against Navinder Singh Sarao, a British Indian financial trader. Among the charges included was the use of spoofing algorithms; just prior to the flash crash, he placed orders for thousands of E-mini S&P 500 stock index futures contracts which he planned on canceling later. These orders amounting to about "$ 200 million worth of bets that
6400-627: The inefficiency of peer review based on research conducted during peer review sessions in university classrooms: This research demonstrates that besides issues related to expertise, numerous objective factors contribute to students' poor performance in peer review sessions, resulting in feedback from peer reviewers that may not effectively assist authors. Additionally, this study highlights the influence of emotions in peer review sessions, suggesting that both peer reviewers and authors cannot completely eliminate emotions when providing and receiving feedback. This can lead to peer reviewers and authors approaching
6500-743: The major market indexes dropped by over 9% (including a roughly 7% decline in a roughly 15-minute span at approximately 2:45 p.m., on May 6, 2010) before a partial rebound. Temporarily, $ 1 trillion in market value disappeared. While stock markets do crash, immediate rebounds are unprecedented. The stocks of eight major companies in the S&P 500 fell to one cent per share for a short time, including Accenture , CenterPoint Energy and Exelon ; while other stocks, including Sotheby's , Apple Inc. and Hewlett-Packard , increased in value to over $ 100,000 in price. Procter & Gamble in particular dropped nearly 37% before rebounding, within minutes, back to near its original levels. Stocks continued to rebound in
6600-456: The market bottom that was established at 13:45:28. During that period, the participant hedging its portfolio represented less than 5% of the total volume of sales in the market. David Leinweber, director of the Center for Innovative Financial Technology at Lawrence Berkeley National Laboratory , was invited by The Journal of Portfolio Management to write an editorial, in which he openly criticized
6700-639: The market would fall" were "replaced or modified 19,000 times" before they were canceled. Spoofing , layering , and front running are now banned. The Commodity Futures Trading Commission (CFTC) investigation concluded that Sarao "was at least significantly responsible for the order imbalances" in the derivatives market which affected stock markets and exacerbated the flash crash. Sarao began his alleged market manipulation in 2009 with commercially available trading software whose code he modified "so he could rapidly place and cancel orders automatically". Traders Magazine journalist, John Bates, argued that blaming
6800-482: The market, then big "buy" or "sell" orders could have led to sudden, big swings. It would have increased the probability of surprise distortions, as in the equity markets, according to a professional investor. In February 2011, the sugar market took a dive of 6% in just one second. On March 1, 2011, cocoa futures prices dropped 13% in less than a minute on the Intercontinental Exchange . Cocoa plunged $ 450 to
6900-475: The most turbulent periods in the history of financial markets. New regulations put in place following the 2010 flash crash proved to be inadequate to protect investors in the August 24, 2015, flash crash — "when the price of many ETFs appeared to come unhinged from their underlying value" — and ETFs were subsequently put under greater scrutiny by regulators and investors. On April 21, 2015, nearly five years after
7000-442: The mutual fund. The Wall Street Journal quoted the joint report, "'HFTs [then] began to quickly buy and then resell contracts to each other—generating a ' hot-potato ' volume effect as the same positions were passed rapidly back and forth.'" The combined sales by the large seller and high-frequency firms quickly drove "the E-Mini price down 3% in just four minutes". From the SEC/CFTC report: The combined selling pressure from
7100-648: The new rules should help provide certainty in advance as to which trades will be broken, and allow market participants to better manage their risks. In a 2011 article that appeared on the Wall Street Journal on the eve of the anniversary of the 2010 "flash crash", it was reported that high-frequency traders were then less active in the stock market. Another article in the journal said trades by high-frequency traders had decreased to 53% of stock-market trading volume, from 61% in 2009. Former Delaware senator Edward E. Kaufman and Michigan senator Carl Levin published
7200-451: The opening) up to that point, plunging 998.5 points (about 9%), most within minutes, only to recover a large part of the loss. It was also the second-largest intraday point swing (difference between intraday high and intraday low) up to that point, at 1,010.14 points. The prices of stocks, stock index futures, options and exchange-traded funds (ETFs) were volatile, thus trading volume spiked. A CFTC 2014 report described it as one of
7300-408: The orders, as well as the manner in which they were entered, were both legitimate and consistent with market practices. These hedging orders were entered in relatively small quantities and in a manner designed to dynamically adapt to market liquidity by participating in a target percentage of 9% of the volume executed in the market. As a result of the significant volumes traded in the market, the hedge
7400-424: The peer review process can be segmented into groups, where students present the papers to be reviewed, while other group members take notes and analyze them. Then, the review scope can be expanded to the entire class. This widens the review sources and further enhances the level of professionalism. With evolving and changing technology, peer review is also expected to evolve. New tools have the potential to transform
7500-441: The peer review process. Mimi Li discusses the effectiveness and feedback of an online peer review software used in their freshman writing class. Unlike traditional peer review methods commonly used in classrooms, the online peer review software offers a plethora of tools for editing articles, along with comprehensive guidance. For instance, it lists numerous questions peer reviewers can ask and allows for various comments to be added to
7600-401: The period of the crash. Others speculate that an intermarket sweep order may have played a role in triggering the crash. Several plausible theories were put forward to explain the plunge. On September 30, 2010, after almost five months of investigations led by Gregg E. Berman, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) issued
7700-471: The policy can be seen in operation. The meeting is preceded by the compilation of an expert report on which participating "peer countries" submit comments. The results are published on the web. The United Nations Economic Commission for Europe , through UNECE Environmental Performance Reviews , uses peer review, referred to as "peer learning", to evaluate progress made by its member countries in improving their environmental policies. The State of California
7800-438: The practice of displaying stub quotes that are never intended to be executed. Officials announced that new trading curbs , also known as circuit breakers , would be tested during a six-month trial period ending on December 10, 2010. These circuit breakers would halt trading for five minutes on any S&P 500 stock that rises or falls more than 10 percent in a five-minute period. The circuit breakers would only be installed to
7900-462: The process of rating clinical behavior or compliance with professional society membership standards. The clinical network believes it to be the most ideal method of guaranteeing that distributed exploration is dependable and that any clinical medicines that it advocates are protected and viable for individuals. Thus, the terminology has poor standardization and specificity, particularly as a database search term. In engineering , technical peer review
8000-402: The producers of the work ( peers ). It functions as a form of self-regulation by qualified members of a profession within the relevant field . Peer review methods are used to maintain quality standards, improve performance, and provide credibility. In academia , scholarly peer review is often used to determine an academic paper 's suitability for publication. Peer review can be categorized by
8100-436: The public markets—a flood of unusual selling pressure that sucked up more dwindling liquidity". While some firms exited the market, firms that remained in the market exacerbated price declines because they "'escalated their aggressive selling' during the downdraft". High-frequency firms during the crisis, like other firms, were net sellers, contributing to the crash. The joint report continued: "At 2:45:28 p.m., trading on
8200-579: The self-assessment group. The author's analysis suggests that self-assessment allows individuals to clearly understand the revision goals at each stage, as the author is the most familiar with their own writing. Thus, self-checking naturally follows a systematic and planned approach to revision. In contrast, the effectiveness of peer review is often limited due to the lack of structured feedback, characterized by scattered, meaningless summaries and evaluations that fail to meet author's expectations for revising their work. Stephanie Conner and Jennifer Gray highlight
8300-462: The sell algorithm, HFTs, and other traders drove the price of the E-Mini S&;P 500 down approximately 3% in just four minutes from the beginning of 2:41 p.m. through the end of 2:44 p.m. During this same time cross-market arbitrageurs who did buy the E-Mini S&P 500, simultaneously sold equivalent amounts in the equities markets, driving the price of SPY (an exchange-traded fund which represents
8400-497: The start of the crash was "topped on 26 (49) preceding days, or 4.3% (8.1%) of the pre-crash sample". Note that the source of increasing "order flow toxicity" on May 6, 2010, is not determined in Easley, Lopez de Prado, and O'Hara's 2011 publication. Whether a dominant source of toxic order flow on May 6, 2010, was from firms representing public investors or whether a dominant source was intermediary or other proprietary traders could have
8500-554: The stock market shut down as they detected the sharp rise in buying and selling". As computerized high-frequency traders exited the stock market, the resulting lack of liquidity "caused shares of some prominent companies like Procter & Gamble and Accenture to trade down as low as a penny or as high as $ 100,000". These extreme prices also resulted from "market internalizers", firms that usually trade with customer orders from their own inventory instead of sending those orders to exchanges, "routing 'most, if not all,' retail orders to
8600-450: The total trading volume, while buying only about 200 additional contracts net. As prices in the futures market fell, there was a spillover into the equities markets. The computer systems used by most high-frequency trading firms to keep track of market activity decided to pause trading, and those firms then scaled back their trading or withdrew from the markets altogether. The New York Times then noted, "Automatic computerized traders on
8700-455: The total volume in the futures markets, which included currencies and commodities, an increase from 22% in 2009. However, the growth of computerized and high-frequency trading in commodities and currencies coincided with a series of "flash crashes" in those markets. The role of human market makers, who match buyers and sellers and provide liquidity to the market, was more and more played by computer programs. If those program traders pulled back from
8800-451: The trading volume calculated over the previous minute, but without regard to price or time". As the large seller's trades were executed in the futures market, buyers included high-frequency trading firms—trading firms that specialize in high-speed trading and rarely hold on to any given position for very long—and within minutes these high-frequency trading firms started trying to sell the long futures contracts they had just picked up from
8900-792: The traditional definition of market making. Specifically, High Frequency Traders aggressively trade in the direction of price changes. This activity comprises a large percentage of total trading volume, but does not result in a significant accumulation of inventory. As a result, whether under normal market conditions or during periods of high volatility, High Frequency Traders are not willing to accumulate large positions or absorb large losses. Moreover, their contribution to higher trading volumes may be mistaken for liquidity by Fundamental Traders. Finally, when rebalancing their positions, High Frequency Traders may compete for liquidity and amplify price volatility. Consequently, we believe, that irrespective of technology, markets can become fragile when imbalances arise as
9000-473: The type of activity and by the field or profession in which the activity occurs, e.g., medical peer review . It can also be used as a teaching tool to help students improve writing assignments. Henry Oldenburg (1619–1677) was a German-born British philosopher who is seen as the 'father' of modern scientific peer review. It developed over the following centuries with, for example, the journal Nature making it standard practice in 1973. The term "peer review"
9100-442: The value of most students' feedback during peer review. They argue that many peer review sessions fail to meet students' expectations, as students, even as reviewers themselves, feel uncertain about providing constructive feedback due to their lack of confidence in their own writing. The authors further offer numerous improvement strategies across various dimensions, such as course content and specific implementation steps. For instance,
9200-505: The writer or the editor to get much out of the activity. As a response to these concerns, instructors may provide examples, model peer review with the class, or focus on specific areas of feedback during the peer review process. Instructors may also experiment with in-class peer review vs. peer review as homework, or peer review using technologies afforded by learning management systems online. Students that are older can give better feedback to their peers, getting more out of peer review, but it
9300-616: The writing craft at large. Peer review can be problematic for developmental writers, particularly if students view their writing as inferior to others in the class as they may be unwilling to offer suggestions or ask other writers for help. Peer review can impact a student's opinion of themselves as well as others as sometimes students feel a personal connection to the work they have produced, which can also make them feel reluctant to receive or offer criticism. Teachers using peer review as an assignment can lead to rushed-through feedback by peers, using incorrect praise or criticism, thus not allowing
9400-488: The writing craft overall. Academic peer review has faced considerable criticism, with many studies highlighting inherent issues in the peer review process. The editorial peer review process has been found to be strongly biased against ‘negative studies,’ i.e. studies that do not work. This then biases the information base of medicine. Journals become biased against negative studies when values come into play. “Who wants to read something that doesn’t work?” asks Richard Smith in
9500-473: Was arrested for his alleged role in the flash crash. According to criminal charges brought by the United States Department of Justice , Sarao allegedly used an automated program to generate large sell orders, pushing down prices, which he then canceled to buy at the lower market prices. The Commodity Futures Trading Commission filed civil charges against Sarao. In August 2015, Sarao was released on
9600-422: Was completed in approximately twenty minutes, with more than half of the participant's volume executed as the market rallied—not as the market declined. Additionally, the aggregate size of this participant's orders was not known to other market participants. Additionally, the most precipitous period of market decline in the E-Mini S&P 500 futures on May 6 occurred during the 3½ minute period immediately preceding
9700-537: Was designed to give investors the best possible price when dealing in stocks, even if that price was not on the exchange that received the order. At first, while the regulatory agencies and the United States Congress announced investigations into the crash, no specific reason for the 600-point plunge was identified. Investigators focused on a number of possible causes, including a confluence of computer-automated trades, or possibly an error by human traders. By
9800-527: Was first used in the early 1970s. Since 2017 a monument to peer review is at the Higher School of Economics in Moscow. Professional peer review focuses on the performance of professionals, with a view to improving quality, upholding standards, or providing certification. In academia, peer review is used to inform decisions related to faculty advancement and tenure. A prototype professional peer review process
9900-547: Was recommended in the Ethics of the Physician written by Ishāq ibn ʻAlī al-Ruhāwī (854–931). He stated that a visiting physician had to make duplicate notes of a patient's condition on every visit. When the patient was cured or had died, the notes of the physician were examined by a local medical council of other physicians, who would decide whether the treatment had met the required standards of medical care. Professional peer review
10000-490: Was released on bail, banned from trading and placed under the care of his father. Sarao pleaded guilty to one count of electronic fraud and one count of spoofing. In January 2020, he was given a sentence of one year's home confinement , with no jail time. The sentence was relatively lenient, as a result of prosecutors' emphasis on how much Sarao had cooperated with them, that he was not motivated by greed and his diagnosis of Asperger syndrome . A stock market anomaly ,
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