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Flash Surge in World’s Biggest ETF Linked to ‘Outlandish’ Trades
ISOs powered sudden spike in SPY on Monday. Thin liquidity, human error are suspects in single-second jump. On Monday, SPY spiked to $378.46, for less than one second./1
More than 150,000 trades were executed at $370 or above, totaling almost $58 million. SPY’s spike blamed on intermarket sweep orders. ISOs are automated trades that “sweep” the market picking up as many shares as possible at the best price available./2
When liquidity is low or ISOs are being used aggressively, it raises the possibility they can rapidly consume the better-priced shares at a single exchange and keep going -- paying more and more to fill the order./3
On Monday about 96 million shares of SPY changed hands, below the average of almost 102 million shares. Observers to conclude the spike was more likely human error rather than a structural glitch./4
The number of transactions surged fill almost 66 screens and about 85% of them are marked as ISOs./5
