Sorry - don't want to get pedantic here but stop hunting and data feed errors are not the same thing. From my experience with this, which is actually fairly extensive since I spent about a year or so making consistent money from these spikes, those shown above on the chart are errors.
The quickest way to tell is the length of time of the spike. Errors cause sudden (and noticeably large) jumps in the tick value. This means gaps are caused in the price since the market never traded there.
Traditional stop hunting is a manipulation of price to deliberately trigger a number of stops. The price is ACCURATE but the move is caused by MANIPULATION. If The GBP was at 1.9985, there may be a vested interested in hitting the stops of shorts placed just above the round number and the respective longs at that level and there needs to be fluid movement (although admittedly it could be sharp) to do this since its done by "driving" the price to these levels by sitting on the bid/offer.
Now broker stop hunting (creating a FALSE price) may exist but not in the way you see on those charts.
A broker can probably quote a price a small amount from the underlying and claim that on their feed that was where the price was - however, a 700 tick spike in the S&P -or, on a smaller scale, a 30 pip spike in the euro at a time when the price is static with other brokers/correlated markets is clearly an error and despite the fact that brokers may have some leeway in filling orders I don't believe that they would hold any client to a fill at that level.
Nearly all these brokers will reinstate your position if you are stopped out on one of these spikes and if they didn't, the FSA/US equivalent would probably come down on them like a ton of bricks. I've spent a long time on the phone with my broker about this and know that they have reinstated all client positions that have been unfairly stopped out - if they hadn't, then they would have been forced to honour my quote at the underlying.
Anyway, this is a bit off topic - I started a thread about on the FF a while back.
Wiz
The quickest way to tell is the length of time of the spike. Errors cause sudden (and noticeably large) jumps in the tick value. This means gaps are caused in the price since the market never traded there.
Traditional stop hunting is a manipulation of price to deliberately trigger a number of stops. The price is ACCURATE but the move is caused by MANIPULATION. If The GBP was at 1.9985, there may be a vested interested in hitting the stops of shorts placed just above the round number and the respective longs at that level and there needs to be fluid movement (although admittedly it could be sharp) to do this since its done by "driving" the price to these levels by sitting on the bid/offer.
Now broker stop hunting (creating a FALSE price) may exist but not in the way you see on those charts.
A broker can probably quote a price a small amount from the underlying and claim that on their feed that was where the price was - however, a 700 tick spike in the S&P -or, on a smaller scale, a 30 pip spike in the euro at a time when the price is static with other brokers/correlated markets is clearly an error and despite the fact that brokers may have some leeway in filling orders I don't believe that they would hold any client to a fill at that level.
Nearly all these brokers will reinstate your position if you are stopped out on one of these spikes and if they didn't, the FSA/US equivalent would probably come down on them like a ton of bricks. I've spent a long time on the phone with my broker about this and know that they have reinstated all client positions that have been unfairly stopped out - if they hadn't, then they would have been forced to honour my quote at the underlying.
Anyway, this is a bit off topic - I started a thread about on the FF a while back.
Wiz
Raz
