Excuse me? 1010 point swing from a 'fat finger'? Horse Hockey!

[Big Fitz]

I am incredulous. A single error caused this much higgledy piggldey in the market? Nope. I don't buy it. Furthermore, when I saw the companies this error centered on I am more curious as to what they have in common and what the association is at Citibank. Something just doesn't add up and I don't know what but this is what got me thinking there's more to this story:

Nesto named eight stocks that were hit with the supposed computer error/bad trade, if that’s indeed what happened, that went all the way down to zero or one cent, including Exelon (NYSE:EXC), Accenture (NYSE:ACN), CenterPoint Energy (NYSE:CNP), Eagle Material (NYSE:EXP), Genpact Ltd (G), ITC Holdings (NYSE:ITC), Brown & Brown (NYSE:BRO), Casey’s General (NASDAQ:CASY) and Boston Beer (NYSE:SAM)

The whole article:

CNBC's Bartiromo: 'That is Ridiculous. This Really Sounds Like Market Manipulation to Me'

 

[mascale]

Imagine, if you will, on planet now even near you, that greedy slime had profiteered from the basis-free Iraq and Afghansitan War procurements spending: And had put a lot in the stock market, and had lost a lot already.

So when they bought again, they had limiting sell points.

Then nearly 300 separate stocks had down-drafts. Then limit sales kicked in, and in, and in, and in, and so on. One silly mistake can create a downdraft.

The "Glitches" of U.S., basis-free intended war casualties cannot be reversed.

The people who caused it all, on the other hand, can have their wounds healed overnight. Nearly 300 companies had their unusual Thursday stock trades rescinded!

"Crow, James Crow: Shaken, Not Stirred!"
(The U. S. President, during remarks Friday morning, appears to have had a calming markets effect....as the the day moved along! The Tea Party screaming does appear to have died down, glitches that they were!)

 

[Paulie]

Imagine, if you will, on planet now even near you, that greedy slime had profiteered from the basis-free Iraq and Afghansitan War procurements spending: And had put a lot in the stock market, and had lost a lot already.

So when they bought again, they had limiting sell points.

Then nearly 300 separate stocks had down-drafts. Then limit sales kicked in, and in, and in, and in, and so on. One silly mistake can create a downdraft.

The "Glitches" of U.S., basis-free intended war casualties cannot be reversed.

The people who caused it all, on the other hand, can have their wounds healed overnight. Nearly 300 companies had their unusual Thursday stock trades rescinded!

"Crow, James Crow: Shaken, Not Stirred!"
(The U. S. President, during remarks Friday morning, appears to have had a calming markets effect....as the the day moved along! The Tea Party screaming does appear to have died down, glitches that they were!)

A limit order is an order to execute a trade ONLY at a specific price. A stop order on the other hand, is an order to execute a trade at any point once the stop order's price has been met. So on a day like the other day where there was a huge gap down, your order does not necessarily execute where you set the price at. You wait in line and your order is filled whenever it is filled. If you're the unlucky bastard that doesn't get filled until the bottom of the gap, so be it.

You should understand what you're talking about before opining.

 

[Liability]

Since my wife got me Sirius Satellite Radio for my car (for morning commuting) at a time when she mistakenly thought I still listened to Howard Stern (I used to listen a lot, but he became kind of boring in a one note kinda way), I have Sirius to this day. Thus, I get to tune into the conservative talk radio "Patriot" Station. At first I was not a huge fan of the guy that comes on after Ed Bennett. The guy's name is Mike Church. Take him or leave him, he is quite consistent and driven by principle. I find him informative.

A day or two ago (I think it was yesterday morning), he also mocked the idea that "fat fingers" somehow caused the market to crash. He lays it off to something less sinister. The computer programs did it.

Automated programs calculate tons of different variables in nanoseconds. When Japan suddenly announced that they were printing some weird ass trillion new yen (tens of billions of dollars) this had to be factored into the constantly updated calculations. And things ran from there. Sell orders were computed and automatically executed. This sent additional signals to the "skynet" network of automated buyer/seller trading programs for very large institutional traders and they all hit more or less at the same time. This NEW information then manifested itself resulting in yet MORE (pretty much uniform and simultaneous) sell orders.

It supposedly happened too fast to be explained in any other way (short of a lunatic conspiracy theory for which there is no actual evidence).

The automated traders from the very large trading firms are institutionally known, I understand, as HFT's. High Frequency Traders. There is, I understand, a "trip wire" inserted into the trading markets, nowadays, to prevent such things from going too far, but the trip wire didn't get tripped because the point drop required for that automatic system to kick in is in the neighborhood of 2500 points and this mess was "only" a thousand or so points.

The good news (if that analysis is correct) is that there is no "conspiracy" involved, necessarily. The bad news is, this entire market of trading is likely to enter a period of bad fluctuations as it teeters near the edge of a collapse. It is (supposedly) all of this fake money being printed so massively (electronically and otherwise) by us, the Europeans and the Japanese, etc., that is behind this HFT computer algorithm leading to such SELL conclusions. A critical mass may have been reached.

There may be time to fend it off. But it's gonna take a lot of work and discipline. The reaction of the idiots, like the amazingly shortsighted foolish protesters in Greece, can only slow down our response time. But we are running OUT of time and can't afford these irrational delays.

 

[Big Fitz]

My money, if there was a live person responsible was on the "oops... did I *DO* that?? Myyy bad... heh heh heh." with a little naughty little kid look of you can't prove it WASN'T a mistake look. Just an individual acting alone on the left to harm a few key companies for political reasons.

There's where my money was.

 

[Paulie]

dude..

It could be a number of different things that caused that to happen.

What caused it matters a lot less at this point than what becomes of it.

 

[georgephillip]

High Frequency Trading (HFT) has the potential to make all markets today subject to manipulation for private gain by brokers buying or selling ahead of large institutional orders coming in from their clients.

HFT allows the "front running" program trader an early look at major incoming orders and the opportunity to jump in front of them and skim profits off the top.

"And these large institutional orders are our money--our pension funds, mutual funds, and 401ks." (emphasis in original)

If it's true that "High frequency trading firms now account for 73% of all US equity trades, although they represent only 2% of the approximately 20,000 firms in operation..." the dubious practice of "flash trades" gives insiders a huge advantage.

Some Alternative Trading Systems allow incoming orders to be revealed (or flashed) to a trader a fraction of a second before being sent to the national market system.

"The flash peek reveals the trade coming in but not the limit price...This is what the HFT figures out, and it is what gives the high frequency trader the same sort of inside information available to the traditional market maker:

"He now gets to peek at the other players cards."