Zeev's Turnips Patch-No Politics (ZEEV)

[sylow]

Following up on the speculation... suppose a few of the big boys are being used to provide liquidity. (As has been alleged.) They buy and sell lots of shares very fast, basically to themselves, just to make sure there are enough shares moving around to make a market. If they stop, the market stops and selling a share is like selling ice to eskimos.

This all works very well, and may even keep the market trending upward. But one day someone puts in a big sell order, and the liquidity traders have to start losing money as the shares they rapidly buy and sell become worth less as they hold them.

The high-speed traders stop. Liquidity disappears, because it was never really there in the first place. But the big seller is still selling, so stock prices go to zero. (As apparently some did yesterday.)

A "computer glitch"? You betcha.