(OT) NYSE Considers Algo-Only Trading in Case of Emergency

I just can't wait.

From Reuters reporting on Wall Street Journal article (3/9/2013):

(Reuters) - The New York Stock Exchange is readying plans to be able to operate without human traders in case another disaster, such as Superstorm Sandy, forces the shutdown of its historic trading floor in downtown Manhattan, The Wall Street Journal reported.

NYSE Euronext (NYX.N) is preparing to submit details of the plan to the U.S. Securities and Exchange Commission, according to the report, which cited people involved in the preparations. If activated, the plan would represent the first time the 221-year-old exchange would rely entirely on computer systems, without the oversight of floor-based traders, the paper said.

A NYSE spokesman declined to comment on the report.

The disaster plan would shift trading entirely to Arca, NYSE's all-electronic sister market. It would replace NYSE's current backup plan that calls for the exchange to remain open in a limited capacity while sending orders to Arca to be filled.

Exchanges including Direct Edge Holdings LLC and BATS Global Markets Inc BATS.Z in the past year have moved to develop backup sites in Chicago, the paper said. Nasdaq OMX Group Inc (NDAQ.O) maintains a disaster recovery site in Ashburn, Virginia, and can run its U.S. markets from its European base in Stockholm.

Superstorm Sandy forced the first weather-related multi-day shutdown of the U.S. stock market in more than 120 years when it struck the East Coast in October.

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OT: New York Stock Exchange Trading Floor to Close, Starting Monday

(UPDATE) NYSE electronic market and NASDAQ will be closed on Monday, probably on Tuesday also. Sorry algos. The US stock index futures are slowly sinking, with Dow futures at minus 39.

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because of Hurricane Sandy coming their way. As humans evacuate, all the trading will be done on its electronic exchange. (Have fun, algos.)

From Zero Hedge (10/28/2012):

The NYSE has just released a statement clarifying its hours tomorrow - due to the storm:

• *NYSE TRADING FLOOR TO CLOSE TOMORROW; ALL TRADING TO BE ON ARCA

So, hold tight as all those low-lying humans will have left the building in the calm thoughtful hands of Johnny-5 and his friends.

Via Bloomberg:

Oct. 28 (Bloomberg) -- The New York Stock Exchange said it will shut its trading floor starting tomorrow and invoke contingency plans to move all trading to NYSE Arca, its electronic exchange, as Hurricane Sandy heads toward the city.

“The re-opening of physical trading floor operations is subject to city and state determinations and local conditions; updates will be forthcoming,” NYSE Euronext said in a statement today.

NYSE Amex Options will open electronically and NYSE MKT, formerly known as NYSE Amex, will be suspended, the exchange operator said.

But that doesn't stop him for catching some storm surge at Rockaway Beach... (from Bloomberg):

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"Network Issues" on NYSE at 10:27AM EST

Uh oh... Watch out below? From Zero Hedge.

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More on May 6 Market Meltdown: HFT and Dark Pools

Wall Street Journal has some interesting bits of information about the stock market near-meltdown on May 6.

In the May 8 article "Computer Trading Is Eyed",

There were abnormally wild moves in currency tradings, [particularly Japanese yen, which surged more than 2% in a matter of minutes (a huge movement in currencies)], before the turbulance started in the stock market.

The heavy sell order on Procter and Gamble (PG) doesn't look like a "fat finger" - i.e. trading mistake, but it does seem to have caused the indices (it is a Dow and S&P500 component) to drop. It does coincide with the withdrawal of liquidity by high-frequency trading firms (see below).

The high-frequency trading firm Tradebot Systems Inc. dropped out of market making when Dow hit -500 mark. So did other HFT firms, draining the market liquidity that they were supposed to provide.

NYSE, when the plunge started, did halt trading, or slowed it. But that probably caused more damage than good, as sell orders, which were growing extremely heavy by the second, were routed to other electronic exchanges including dark pools like DirectEdge, where there was hardly any liquidity. So the sell orders were met by ever-disappearing, ever-dropping bids.

The article still doesn't say WHO placed the big sell order on PG, and WHO stopped the freefall and HOW.

I should also ask, WHY?

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