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It's really fascinating (horrifying?) that some of these ETFs went to zero for a moment. I can't understand how they cancel all these trades though. Seems like

It's really fascinating (horrifying?) that some of these ETFs went to zero for a moment. I can't understand how they cancel all these trades though. Seems like the biggest accounting nightmare ever.

randallsquared 16y ago
It actually seems like standard procedure. They reset the market after 9/11, too. Basically, it seems like any time something really unusual happens, it's an excuse to go outside the rules. Back when I was involved in digital gold currencies, this kind of thing seemed pretty standard across the board: banks would just reverse transactions, freeze accounts, etc, any time there was anything unusual, and it seemed like our whole business was unusual, so we were in constant fear that money we'd received and disbursed would suddenly be unreceived after the fact. It was a nightmare, though; you got that part right. My take away from my experience in that industry was that you can't actually trust banks or other financial institutions to follow the rules; the best thing you can do is to make sure you're lost in the crowd. Don't stand out, and you won't get hammered down. These trades and this whole episode stood out, so of course they're going to retroactively change it to the detriment of anyone for whom it was a good thing.
- studer 16y ago
  What rules are you referring too? Are you saying that Nasdaq violated their own rules when they rolled things back?
  - randallsquared 16y ago
    Oh, not specifically and officially; I don't know what actual contractual or legal rules surround this, and it could well be that trading is contingent on a contract that allows them to do whatever they want. By "rules", I mean the usual rules that people believe are in force, like "Once I buy or sell, it stays bought or sold". In exceptional situations (like this one, or 9/11), it always seems to turn out that honoring obligations was optional all along, doesn't it?
sp332 16y ago
On certain exchanges, cancellations happen constantly. It's complex, but it's part of day-to-day operations and after a while it stops feeling unusual.

It's really fascinating (horrifying?) that some of these ETFs went to zero for a moment. I can't understand how they cancel all these trades though. Seems like the biggest accounting nightmare ever.

randallsquared 16y ago

It actually seems like standard procedure. They reset the market after 9/11, too. Basically, it seems like any time something really unusual happens, it's an excuse to go outside the rules. Back when I was involved in digital gold currencies, this kind of thing seemed pretty standard across the board: banks would just reverse transactions, freeze accounts, etc, any time there was anything unusual, and it seemed like our whole business was unusual, so we were in constant fear that money we'd received and disbursed would suddenly be unreceived after the fact. It was a nightmare, though; you got that part right. My take away from my experience in that industry was that you can't actually trust banks or other financial institutions to follow the rules; the best thing you can do is to make sure you're lost in the crowd. Don't stand out, and you won't get hammered down. These trades and this whole episode stood out, so of course they're going to retroactively change it to the detriment of anyone for whom it was a good thing.

studer 16y ago
What rules are you referring too? Are you saying that Nasdaq violated their own rules when they rolled things back?
- randallsquared 16y ago
  Oh, not specifically and officially; I don't know what actual contractual or legal rules surround this, and it could well be that trading is contingent on a contract that allows them to do whatever they want. By "rules", I mean the usual rules that people believe are in force, like "Once I buy or sell, it stays bought or sold". In exceptional situations (like this one, or 9/11), it always seems to turn out that honoring obligations was optional all along, doesn't it?

sp332 16y ago

On certain exchanges, cancellations happen constantly. It's complex, but it's part of day-to-day operations and after a while it stops feeling unusual.