For five minutes today, from 10:57 to 11:02 a.m. EST, according to the The Wall Street Journal's Steven Russolillo, Apple stock stopped trading for reasons, at first, nobody could figure out, but now look attributable to the "bad trades" on the BATS market. Beyond not understanding what that really means, observers found the whole thing particularly mysterious because Apple has quite the strong stock, reaching over $600-per-share during the launch of its new iPad. It has gotten so valuable that some folks have compared the company's value to the entire country of Poland and the entire U.S. retail sector. Apple will be okay after the debacle, but BATS, which is a small alternative-to-NASDAQ stock exchange.
Trades coming in way below the usual price halted the stock, from what Deal Journal's Dave Benoit is calling "technical issues." The market's site has an alert up top saying "BATS has declared self-help against another market center, or is actively investigating an issue. Further information will be provided below as it becomes available." This glitch caused Apple's stock to go from $551.66 to $542.80 in microseconds, according to FactSet, via Russolillo. And, it has also caused BATS stock, on its first day out -- the company IPO-ed today -- to an eventual halt after opening lower than expected, notes Benoit.
Apple has since started trading again and the NASDAQ has announced it will cancel trades made on the BATS market, so looks like Apple's stock market dominance will continue. You can see it has pretty much recovered from that little dip around 11 a.m. BATS, on the other hand, still has the glitch notice up. And, as of now, BATS has also halted its IPO, reports The Wall Street Journal. Plus, on top of technical and IPO issues, the high-spreed trading tactic BATS uses, which it hopes will give it an edge over the New York Stock Exchange, are under investigation by the Securities and Exchange Commission, as outlined by a cover story in today's Wall Street Journal. "High-speed trading firms use powerful computer systems for rapid-fire trades, in which they often hold stocks for only fractions of seconds. They benefit by being able to move quicker than less technologically proficient investors," explain The Journal's Scott Patterson and Jean Eaglesham. The SEC is looking into if this gives BATS and others an unfair advantage.