Waddell was selling e-minis to hedge.....
````````````````````````````
Waddell Is 'Mystery Trader' in Stock Plunge
"Waddell & Reed Financial Inc., an Overland Park, Kan., brokerage and mutual-fund firm, was identified as the mystery trader that sold a large amount of futures contracts during the decline. Commodity Futures Trading Commission Chairman Gary Gensler, without identifying the firm, has cited the trading as one of many factors that contributed to the Dow Jones Industrial Average's nearly 1,000-point intraday decline....
In congressional testimony Tuesday, Mr. Gensler said that at about 2.32 p.m. EDT, one market participant started heavy selling of a kind of S&P futures contracts known as "e-minis." That participant continued to sell through the depth of the decline and even during the rebound, up until about 2.51 p.m. The investor, the CFTC said, represented about 9% of the volume traded during that period.
Mr. Gensler described the trading as a "bona fide hedging transaction" by "one large investor" and not a trader trying to manipulate the market. Reuters first reported that the investor was Waddell & Reed, citing documents prepared by CME Group Inc., the futures exchange's operator.
A Waddell spokesman declined to comment specifically on whether it was the trader noted by Mr. Gensler. But in a statement, the company said: "Quotes attributed to executives at the CME and the CFTC note that Waddell & Reed has executed trades of this size previously, and indicate that we are a 'bona fide hedger' and not someone intending to disrupt the markets."
On May 6, Waddell said, the firm "executed several trading strategies, including index futures contracts, as part of the normal operation of our flexible portfolio funds."
http://online.wsj.co...4215565216.html
Edited by dTraderB, 15 May 2010 - 05:59 PM.
