ASIC examines trading spike

The market regulator is examining an sudden spike in the share price of a number of ASX 200 companies.

Most noticeable was a large, brief spike in ANZ shares, which jumped from Wednesday's close of $25.96 to $27.63 at the opening of Thursday's trade.

ANZ shares later stabilised to be trading up 0.5 per cent at $26.08 by Thursday afternoon.

Commonwealth Bank shares also traded in a wide range from $57.50 at the open to as low as $56.81 within 10 minutes of trade commencing.

The sharp movements in several major companies were enough to drive the ASX 200 index up almost 40 points at the open to 4,568 before it immediately plunged back to 4,547.

The market later stabilised to be 0.9 per cent higher at 4,571 after some positive Chinese economic data.
The Australian Securities and Investments Commission (ASIC) says it is looking into the volatile early trading but has not launched a formal investigation.

"ASIC is aware of a surge in the share price of a number of major ASX 200 stocks this morning and, in line with its normal practice, is looking into the matter and has commenced enquires with the market participants involved in trading in these stocks and related derivatives," it said in a statement.

"More broadly, market integrity is fundamental to what we do and if we detect any potential breaches of the law or market integrity rules we will take timely and appropriate action."

The major companies affected by unusually large opening share spikes were those at the beginning of the alphabet, which begin trading first on the share market as it progressively opens from 10am.

"The prices of a number of securities opened substantially higher than their previous close due to strong, early buying orders. Prices generally retreated shortly after the market opened," the ASX noted in a statement.

"Most impact was experienced by certain stocks in the AB group, including AMP, ANZ, AGL and Brambles."

Volatility

Some brokers have suggested the spike may have been related to options contracts connected to the ASX 200 index, known as XJO options, that are expiring today.

The price of those options is related to the opening value of the ASX 200, and there are concerns that this morning's spike may have been an attempt to manipulate the value of those options.

The ASX says volatility is usually higher on days when major options are expiring.

"Today was the expiry day for the October ASX 200 Index futures contracts, which often generates heightened trading activity as investors seek to unwind their positions," the exchange added in its statement.
Some traders say the unusually large spikes may have simply been the result of some human or computer generated error.

CMC's chief market strategist Michael McCarthy also says the price spike may have represented a market imbalance generated by traders legitimately closing off positions relating to the expiring options.
"The way some traders close out their positions, and investors as well, is to execute share trades on the opening this morning," he told ABC News 24.

"So it's quite possible that some of those moves we saw simply represented a temporary imbalance in those share prices rather than anything untoward."

abc.bet.au 18 Oct 2012

The Big 4 (referring to ANZ, Commonwealth, NAB, Westpac) banks ARE in collusion with each other as reported many times.

Fraud and insider trading is rampant at the Stock Exchange level.

The so called watchdog will be spineless and do nothing, as this is a global policy.

The interests of the brotherhood outweigh the interests of the general populous.