Energy traders have been puzzled by a fleeting plunge in natural gas futures, the latest instance of anomalous price moves following the shift of commodities to electronic platforms.
The New York Mercantile Exchange floor had been closed for more than five hours when late on Wednesday Nymex July natural gas dropped 39 cents, or 8.1 per cent, to $4.510 per million British thermal units. After a few seconds, it bounced back up.
“It’s ugly price action that does not reflect well on the market’s reputation for fair trade,” said Tim Evans, energy analyst at Citi Futures Perspective.
Some market watchers attributed the decline to a “fat finger” error, when a trader mistakenly types an extra zero on the end of an order, increasing its size by a factor of 10.
Others blamed it on a glitch in computer algorithms that trade futures. Volume was light, meaning any big order would have had an outsize impact and potentially triggered automated selling.
Speaking of natural gas topping...wow!
I was surprised by this morning's gap up and was surprised again when I just now checked it.
http://stockcharts.c...4129&r=7739.png
Edited by Rogerdodger, 09 June 2011 - 11:57 PM.
