So who hasn't lived through the day ))) - page 13
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Quote from analysts: -
"Everyone has already heard about the pound's collapse today at the start of the Asian session. But here is the question: how deep was this fall actually? Holders of options and other currency contracts especially worry about it, but the answer is not so easy, as it may seem at first sight. The attentive reader has probably noticed that different sources indicate different magnitude of the fall of the pound/dollar, with a spread sometimes reaching several hundred points, and this, by the way, is someone's gain or loss. The problem is that currencies are traded on dozens of different platforms, and each of them displays only those transactions (and at those prices) that took place within its ecosystem. Usually the difference between the quotes is negligible or non-existent. But today, things are just as unusual.
The benchmark (especially for the pound) is often taken as the quotations of EBS, a trading platform owned by the inter-dealer broker ICAP. On it, the pound fell to a low of 1.1938 - trades at that level were "on low volume". Bloomberg reports a fall to 1.1841, but the pound suffered the worst at Reuters, where the system initially recorded a low of 1.1378, well below all other platforms. Then, this value was corrected, and now the absolute low is set at 1.1491 at 23.07 GMT, that is when the fall began. But that's not all. Reuters also publishes a "market low" on "good volumes", i.e. at least 5 million GBP. So that's 1.15 and it was reached at about the same time as the absolute.
How these proceedings will end and what the consequences for the market will be is not yet known.
You'd think the connoisseur Sanych would be eating his own tie.
And you should be looking for the cause where it's at its lowest point.
I'm not chewing on a tie, I'm chewing on a picture of the very, very OC, which had a spread ejection of 600 pips at this very time. That's the problem, it's the confusion over the currency itself.
In my personal opinion, something like the following happened - someone decided to sell the pound at the Asian session and made a mistake with the volumes. At low liquidity all the requests from the cup were instantly selected and the gap was formed. Robots trading in the market may well have the protection to remove orders before the situation is cleared, i.e. there was a chain reaction of withdrawal of orders, which led to an instantaneous total disappearance of liquidity.
I agree with your version.
Now it is clear that Low at different DCs turned out to be tied to different liquidity providers.
If there was a simple widening of the spread, it would look like a bump up or down on the chart and then the price chart would move as if nothing had happened at the same level where the bump started. In the chart we see that bid has fallen by 6000 points and then bid returned to 4000 points. Altogether: bid has shifted down by 2000 points in a couple of minutes and did not return to the previous level again. At the same time, the spread did not exceed 382 points. As we can see, the spread has nothing to do with it, to put it mildly.
Quote from an analyst: -
"Everyone has already heard about the pound's collapse today at the start of the Asian session. But here is the question: how deep was this fall actually? Holders of options and other currency contracts especially worry about it, but the answer is not so easy, as it may seem at first sight. The attentive reader has probably noticed that different sources indicate different magnitude of the fall of the pound/dollar, with a spread sometimes reaching several hundred points, and this, by the way, is someone's gain or loss. The problem is that currencies are traded on dozens of different platforms, and each of them displays only those transactions (and at those prices) that took place within its ecosystem. Usually the difference between the quotes is negligible or non-existent. But today, things are just as unusual.
The benchmark (especially for the pound) is often taken as the quotations of EBS, a trading platform owned by the inter-dealer broker ICAP. On it, the pound fell to a low of 1.1938 - trades at that level were "low volume". Bloomberg reports a fall to 1.1841, but the pound suffered the worst at Reuters, where the system initially recorded a low of 1.1378, well below all other platforms. Then this value was corrected, and now the absolute low is set at 1.1491 at 23.07 GMT, that is when the fall began. But that's not all. Reuters also publishes a "market low" on "good volumes", i.e. at least 5 million GBP. So that's 1.15 and it was reached at about the same time as the absolute.
How these proceedings will end and what the consequences for the market will be is not yet known.
Reuters 1.1450 - 1.2624
6000 in 5 digits and the spread in 4 digits. So it's a match.