

Six companies, including owners of Sam Adams, traded today at $0.00 per share - goodside
http://blogs.wsj.com/deals/2010/05/06/four-mega-drops-of-the-flash-crash-sam-adams-goes-flat/

======
jrockway
_Traded_ at $0.00 a share? Or the consumer-level database that this guy is
looking at says "zero"?

(Sadly, I work in currency trading, so I don't have any better data about
this. But I know when I see a 0 in the database, I take that to mean "computer
error", not "someone bought a billion euros for zero dollars". Because even
buggy computer programs aren't that stupid.)

~~~
goodside
The (relatively) gradual rebound in price suggests the trades actually
happened. It's not a removable discontinuity, so to speak.

And, frankly, if you were coding an automated trading system, it wouldn't be
_that_ unreasonable to write a "sell at any price" algorithm that doesn't
cover the eventuality that a stock with a market cap as large as these might
have literally no bids higher than $0.00. (My highly speculative amateur
theory is that this is what actually happened: The NYSE froze trading on these
stocks for an extremely brief period, as it did with many stocks today, and a
handful of automated trading systems scrambled to electronic exchanges, where
volumes were low enough that a $0.00 bid issued by some cleverly well-prepared
hedge fund was the best around.)

~~~
drusenko
some of the articles go into detail on specific trades (with the number of
shares) that actually happened at $0.01 (or $0.000001 or whatever the number
is that is meant to represent $0).

so it ultimately looks like a factor of events caused some people's simplistic
trading programs to give away their shares for free, and the people smart
enough to buy them up at near-zero did.

that's my best guess at this point, anyway. looking forward to hearing what
actually happened :)

------
bediger
Hey! I see that Accenture finally got a rational valuation and price!

No, I'm not a big fan, having experienced them as long ago as "Anderson
Consulting" days.

~~~
DLWormwood
Yup, some of Andersen's reps back during that time was responsible for
disbanding my alma mater's chapter of ACM. We invited them to have a talk to
CS students about IT careers and they were offended by how our chapter
advertised the talk. (I felt partly responsible, I normally copywrote signage
for the club, but due to class pressures somebody else took over just before
this incident.) The reps complained, and we had to write a letter of apology
and disband because of some words on a sign. (The wording wasn't even
offensive or in slang, they just were uptight about how their organisation was
presented.)

------
jackfoxy
There was a real melt-down. For a while Yahoo! Finance and Bloomberg were both
unavailable. Google's finance page continued to function during that time. A
friend was able to trade on Schwab and Fidelity, but E-Trade wasn't able to
return trade confirmations, and eventually told my friend their market maker
was down.

------
Qz
_Sothey’s[sic]:

While the other companies on this list hit zero briefly, Sotheby’s went in the
other direction. After opening at $34.61, its shares briefly touched $100,000
before closing at $33._

What is _that_ about?

~~~
tansey
The only conclusion I could draw is that they must have been highly inversely
correlated to a company that tanked. A trading algorithm would potentially
have a pair trade going where the tanked company's shorted while being long
Sotheby's.

That, or the whole system broke down in a very weird way.

------
jacquesm
Seriously, whatever happened to sanity checks on input?

~~~
lmkg
High-Frequency Trading. When your margins depend on squeezing every last
millisecond of performance to beat the speed of the market itself, you don't
have time for an extra conditional branch instruction.

An exaggeration, but not a very large one. The stock market is a high-speed
game, and a lot of players are willing to cut safety features for raw
performance.

~~~
jrockway
But the big players do the safety checks at compile time, so at runtime, it's
simply not possible to make one of these mistakes. Theorem proving might not
be necessary for your "hello world" rails app, but it is something that the
finance industry likely applies.

(Disclaimer: I do not work with any algorithmic trading systems. Humans do a
pretty good job of trading, too.)

~~~
iskander
I can't tell if you're joking.

~~~
jrockway
There is certainly a culture of micro-optimized C++ in the finance world, but
it's not _all_ like that. (It's easier to do easy things than it is to do hard
things, and so there is going to be more easy-to-write software in existence
than hard-to-write software. Hence why you see so much bad C++ -- it's really
easy to write bad C++.)

Jane Street Capital is a good example of a company that advertises their
interest in writing good software:
<http://www.janestcapital.com/technology/ocaml.php>

~~~
iskander
The OCaml type system is a really weak form of theorem proving-- the fanciest
usable thing you can do is phantom types.

When algorithmic trading software gets written in Agda then your comment might
make more sense.

~~~
jrockway
You can run theorem provers on top of these languages, though.

------
tectonic
Do you ever feel like this whole system is a house of cards?

~~~
erlanger
No, not quite.

------
d_c
I'm getting a 404.

------
hristov
By the way, the WSJ has already disappeared this article, so you know it is
something important. And no it is not on google cache.

I found from the google summary that the boston beer company, maker of sam
adams, hit started out at 50, crashed down to 0 and then immediately climbed
back up to 50. Google finance has it crashing down to 14 only, probably
because their graphs are not very granular.

This is really concerning. Not because it crashed (companies fail all the
time), but because it went up and down so quickly without there being any
changes to the actual business prospects of the company whatsoever. It really
shows something is wrong.

~~~
InclinedPlane
It's right here: [http://blogs.wsj.com/deals/2010/05/06/four-mega-drops-of-
the...](http://blogs.wsj.com/deals/2010/05/06/four-mega-drops-of-the-flash-
crash-sam-adams-goes-flat/)

Please don't invent shadowy conspiracy theories where they don't exist.

~~~
hristov
The link was dead when I checked it. Also the link provided by the google
crawler was just as dead, so it could not have been a mistyped link.

So I was correct that the link was dead when I said it was. It is possible
that that blog post was so popular that a WSJ server holding it crashed while
the rest of the site remained online. Or it is possible that that the WSJ saw
my post and said "damn, he is onto us, bring it back up!" Anyways, I am
keeping my mind open :)

And regarding "inventing shadowy conspiracy theories where they don't exist",
well they do exist now, since I invented them!

