Stock Exchange Trades Its Own Shares, Plunges Into the Abyss

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

BATS, based in Kansas City, is the third-largest stock exchange in the country. This morning they went public, offering shares in BATS to the public for the first time. Naturally, shares in BATS were traded on BATS itself.

So what happened? At 10:45 AM trading opened and was halted immediately because of a software glitch. At 11:14:18 trading resumed. At 11:14:19:850 — that is, less than two seconds later — the stock had crashed to one-hundredth of a cent. That is not a typo. Via Zero Hedge, here’s a chart showing the first two seconds of trading:

From the Wall Street Journal’s report:

The day’s events may rekindle questions about the reliability of the stock-market’s plumbing, questions that came into sharp focus almost two years ago when the broader market plunged hundreds of points within minutes in what came to be known as the “flash crash.”

….BATS, which stands for Better Alternative Trading System, was launched in 2005 by Dave Cummings, a pioneer in high-frequency trading, to compete with more traditional markets such as the NYSE and Nasdaq. It was designed for speed and gained favor with sophisticated trading firms, in part because it rarely had technical glitches.

Take your pick: (a) This is just a software glitch. It could happen to anyone. (b) This is what happens when the financial market is controlled by computer algorithms, not human beings. It may be “just a glitch,” but it’s a telling one. Next time it could end up being more than just an embarrassing moment.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate