The US has about a dozen stock exchanges. Each stock trades on each stock exchange. Every so often the price of a stock on one exchange will be slightly lower than the price on another exchange. Books have been written about this fact, and people have made long and lucrative careers from it.

But we are talking about small differences in the grand scheme of things. If I were to tell you “Apple Inc. stock has been trading at $174 per share on the NYSE Arca exchange for the last hour, but it’s been trading at $175 on Nasdaq the whole time,” you would not believe me; that is barely even a coherent sentence. For one thing, there are rules to prevent that. But also, I mean, this stuff is all on computers, and these prices are all visible, and there are people who have lucrative careers noticing any differences. If Apple was trading at $174 on Arca and at $175 on Nasdaq, those people would buy it on Arca and sell it on Nasdaq, making a risk-free instantaneous profit. And so many of them would do this so quickly that the prices would more or less instantly converge.

QOSHE - Bitcoin Had a Flash Crash - Matt Levine
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Bitcoin Had a Flash Crash

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20.03.2024

The US has about a dozen stock exchanges. Each stock trades on each stock exchange. Every so often the price of a stock on one exchange will be slightly lower than the price on another exchange. Books have been written about this fact, and people have made long and........

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