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A fast paced stock exchange trips over itself

dealbook.nytimes.com

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Re: A fast paced stock exchange trips over itself

#11

Post by bdr »

moonchrome wrote: post #7
javert wrote: post #4

Earlier quoted context omitted.

Your interpretation of the word "backfire" is unconventional. Also, you're trivializing the challenges likely faced by the kind of venture. It's not always possible to find all bugs, unless you want to code in Ada and formally verify things with OCaml and are trying to fly a plane. The problem could have been caused by a strange hardware defect, a rare bug in a library, etc.

>The problem could have been caused by a strange hardware defect, a rare bug in a library, etc. Or competition, a disgruntled employee, etc. Just speculating but IMO it's a pretty big coincidence that it failed exactly when they did the IPO.

Yes, not to mention the two stocks it failed on.

Re: A fast paced stock exchange trips over itself

#12

Post by _delirium »

olalonde wrote: post #9

Off-topic but related: I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple

Typically a company's stock has a primary listing on one exchange, but may trade secondary instruments on another exchange, usually in another country, in order to appeal to that country's investors. I'm not too knowledgeable about the details, but I believe the secondary listings are structured as a sort of indirect way of owning the equivalent of the primary listing. For companies with a primary listing on a non-U.S. stock exchange, for example, they may have a secondary listing on a U.S. stock exchange by wrapping their equity in an instrument called an American depositary receipt (http://en.wikipedia.org/wiki/American_depositary_receipt).

How exactly these situations should be analyzed, and what their pros/cons are, seems to be an active area of research: http://scholar.google.com/scholar?q=cross-listing

Re: A fast paced stock exchange trips over itself

#13

Post by [deleted] »

olalonde wrote: post #9

Off-topic but related: I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple

[deleted]

Re: A fast paced stock exchange trips over itself

#14

Post by fr0sty »

olalonde wrote: post #9

Off-topic but related: I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple

A stock will have a single "primary" exchange. This is where the stock is "listed" (apple is listed at NASDAQ, for instance).

However a stock may be traded at multiple exchanges (BATS, NYSE, NASDAQ, DirectEdge, etc) as well as other market centers.

Hope that helps...

Re: A fast paced stock exchange trips over itself

#15

Post by tcas »

olalonde wrote: post #9

Off-topic but related: I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple

Yup, there's usually a primary exchange, but a stock can be traded on many exchanges. Years ago people could make money via arbitrage between exchanges. Essentially if stock ABC costed $50 at one exchange, but people were willing to buy ABC at $55 on another exchange, a quick trader could buy the stock at $50 on one exchange, and sell the equivalent on the other exchange for $55, making a "free" $5 without any change in their holdings. Now that we have computerized trading solutions the price difference between exchanges is essentially nil and cannot be taken advantage of unless you have ultrafast computers and access to fiber optic networks.

Re: A fast paced stock exchange trips over itself

#16

Post by rhizome »

javert wrote: post #8
rhizome wrote: post #5

Earlier quoted context omitted.

To be sure, mucking about on the stock exchanges should earn a closer comparison of QA responsibility to aeronautics.

In my opinion, not at all. The stock exchange is an inherently risky market; everbody knows that. The only responsibility you have is to yourself and your own money. That's a far cry from aeronautics.

Just because an activity has risk involved doesn't mean it should be thrown to the wolves.

You might also familiarize yourself with the Just World Fallacy: http://en.wikipedia.org/wiki/Just-world_hypothesis

Re: A fast paced stock exchange trips over itself

#17

Post by TimGebhardt »

olalonde wrote: post #9

Off-topic but related: I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple

Yup, different types of financial products trade differently.

Stocks and bonds are "fungible" meaning that they can be traded on any exchange that will let them, or even via private agreement which is called Over The Counter (OTC).

Futures are not fungible, so contracts that are traded have to be traded on the same exchange where you got them. The main reason for this is that each futures has a contract specification that would need to be the same across exchanges to be fungible: e.g. one contract of light-sweet crude oil is X U.S. gallons of oil at Y quality... The other reason for this is that once the contract has been traded the exchange (or your broker) assumes the counterparty risk if you or your counterpart default on the contract -- so keeping it all on a single exchange helps everyone keep track who sold what to who.

Currencies are the worst: there is no central market. It's all inter-bank agreements and probably the lightest regulated of the bunch. Retail customers get hosed because it's absolutely legal for your broker to front-run your order and skim a couple pennies off your trade.

Re: A fast paced stock exchange trips over itself

#18

Post by rabidsnail »

moonchrome wrote: post #7
javert wrote: post #4

Earlier quoted context omitted.

Your interpretation of the word "backfire" is unconventional. Also, you're trivializing the challenges likely faced by the kind of venture. It's not always possible to find all bugs, unless you want to code in Ada and formally verify things with OCaml and are trying to fly a plane. The problem could have been caused by a strange hardware defect, a rare bug in a library, etc.

>The problem could have been caused by a strange hardware defect, a rare bug in a library, etc. Or competition, a disgruntled employee, etc. Just speculating but IMO it's a pretty big coincidence that it failed exactly when they did the IPO.

Their IPO might have caused a spike in trading volume on their exchange, which might have triggered the bug.

Re: A fast paced stock exchange trips over itself

#19

Post by jack12 »

moonchrome wrote: post #7
javert wrote: post #4

Earlier quoted context omitted.

Your interpretation of the word "backfire" is unconventional. Also, you're trivializing the challenges likely faced by the kind of venture. It's not always possible to find all bugs, unless you want to code in Ada and formally verify things with OCaml and are trying to fly a plane. The problem could have been caused by a strange hardware defect, a rare bug in a library, etc.

>The problem could have been caused by a strange hardware defect, a rare bug in a library, etc. Or competition, a disgruntled employee, etc. Just speculating but IMO it's a pretty big coincidence that it failed exactly when they did the IPO.

The NYTimes article says that the initial offering of BATS "would have been the first company to be listed as well as traded on the exchange", and the post mortem currently at the top of http://www.batstrading.com/alerts/ (no direct link that I can see) says that the A-BFZZZ shard "encountered a software bug related to IPO auctions".

I read that to mean that this is the first time they've ever used their IPO-related code in production and it failed badly. So it sounds like it was the normal sort of bug, in their own code, and their own IPO directly triggered the bug.

Re: A fast paced stock exchange trips over itself

#20

Post by [deleted] »

olalonde wrote: post #9

Off-topic but related: I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple

[deleted]
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