Now raising intellectual capital
Earlier today I posted a column about the role HFT played in the 69%/70 second plunge in shares of Dendreon on April 28. There’s plenty of statistical evidence that demonstrates this incident simply can’t be dismissed as a “bear raid” on a notoriously high-beta stock.
In the 70 seconds that shares of Dendreon were tumbling from $24 to $7.50, some 3 millions shares changed hands in about 10,000 transactions. Nasdaq reports that on an average day, Dendreon’s trading volume is about 2.5 million shares. On an average day there are 10,000 trades of Dendreon shares.
So, that 70 seconds was really a microcosm of a typical trading day for Dendreon.
If you think it’s possible for short sellers to be that organized to push a stock down, there’s a bridge in Brooklyn you may be interested in.
Securities regulators will often settle for the proverbial low-hanging fruit — prosecuting easy cases that don’t make a big difference in the way Wall Street operates. But it does give the appearance they’re doing something.
And so it is with the Securities and Exchange Commission’s proposal to stamp out flash trading, an unsavory practice that has permitted some high-frequency trading desks to get a millisecond sneak peak at market trade orders.