– First Nasdaq Stock Flash-Crashes, Now The Nasdaq Index Is Crashing (Zerohedge, April 4, 2014):
UPDATE: Nasdaq negative year-to-date; Biotechs 3-month lows. AMZN, FB, TWTR, NFLX, P all in Bear market territory
Shortly after 946amET, the stock of The Nasdaq OMX Group suddenly dropped in a mini-flash-crash from from 35.98 to 35.00 in just over 2 seconds on approximately 100,000 shares. As Nanex notes, this is what high-frequency-trading liquidity looks like. But now, an hour or so later, the Nasdaq index and most especialy its Biotech and high-growth names are being crushed. Biotechs are near 3-month lows, Momos are down 16 to 18% since FOMC, and Nasdaq is about to go negative for the year.
As Nanex explains, on April 4, 2014, starting at 9:46:20, the stock of The Nasdaq OMX Group, Inc (Symbol: NDAQ, Market Cap $6.1 Billion) suddenly dropped from 35.98 to 35.00 in just over 2 seconds on approximately 100,000 shares. 500 Trades and 2,600 top of book quotes from 10 exchanges and an unknown number of dark pools participated in the 2.7% price drop. The stock price recovered to $35.77 in just over 1 second on approximately 44,000 shares (200 trades, 1,233 quotes) on 9 exchanges and an unknown number of dark pools.
We call this, HFT (High Frequency Trading) liquidity.