What would you have done to prevent the ETHereum flash crash on Coinbase yday?

https://news.ycombinator.com/item?id=14613622

by noloblo • 9 years ago

8 11 9 years ago

news.ycombinator.com

Stop using stop orders?

limit orders only?

check orders above >1mn $

Finnucane2• 9 years ago

Design a cryptocurrency to have stable value, not speculative-asset value.

noloblo• 9 years ago

how do you do this?

Finnucane2• 9 years ago

The answer is left as an exercise for the reader.

chollida12• 9 years ago

Unfortunately it looks like you had a perfect storm of

1) Large order sent to market

2) Exchanges with a serious lack of liquidity

3) stop loss orders making things worse.

Everyone has their personal pet peeves, mine is stop loss orders. It's one of the 3 things that amateurs tend to use with out any understanding of markets. The other two being use of margin, probably doesn't need any explanation, and trading currencies/currency pairs.

In today's markets, stop loss orders are like market orders........ 99.99% of the time only people who don't know what they are doing use them.

https://news.ycombinator.com/item?id=13847775#13848698

https://news.ycombinator.com/item?id=10129355

https://news.ycombinator.com/item?id=12912781#12913058

dragonwriter2• 9 years ago

Stop loss orders aren't “like” market orders, they are market orders with a triggering event.

chollida12• 9 years ago

Stop loss orders aren't “like” market orders, they are market orders with a triggering event.

A few things about this sentence are wrong, don't worry, markets can be tough to figure out:)

1) By your very sentence you agree they are the same but different?????

2) I never said stop loss orders behaved as market orders, I said they were alike in that most people shouldn't be using them.

4) There isn't 1 type of stop loss.

There is stop loss limit, in which the user specifies a price that the stop loss is triggered and then a limit price that the order is active to. This is sometimes called a stop limit order.

Or stop loss market in which only one price is given, this is the price at which the order translates into a market order. This is sometimes called a stop market order.

Does this clear things up?

graham1776• 9 years ago

Chris-Follow your comments religiously. You always harp on stop loss orders, can you point towards the "right" kind of orders to make instead? Thanks.

unstatusthequo• 9 years ago

Prevent? I wish I had the foresight to have had buy orders in at $0.11 on the rise!

spcelzrd• 9 years ago

Other markets like NYSE and NASDAQ have circuit breakers. If an index declines by a certain amount, all trading is halted so people can think and sort out their positions. This doesn't stop a single stock from flash crashing, but transactions during a flash crash are frequently reversed.

meric• 9 years ago

When a large market order come in, if it looks like it will move the price by more than a certain percentage, warn the seller there isn't enough depth to support his order.

And circuit breakers.

What would you have done to prevent the ETHereum flash crash on Coinbase yday?

Related Stories