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Computer Glitch Causes Havoc and Losses on Nasdaq
goombah99 writes "In an illustration of how fragile the electronic stock market system is the NY Times is reporting how a tiny computer glitch rippled through the Stock Markets with buyers who bought low and sold high taking huge losses. An erroneous large sell order was entered. Many people bought at this low price, then signed options contracts to sell these at higher prices, locking in a profit. Or so they thought utill the erroneous low sell order was removed. Now to honor their options they had to buy the stock at a higher price. Since exchanges trust each other's trade prices it rippled throughout the system. There does not seem to be any way to gracefully undo such errors."
I work for the company in question, and I assure you this is not the case. What basically happened is that the feature which would auto bail-out of a losing position which was in place for client X was discovered and used by client Y, who wasn't even supposed to know about it. Client Y added the setting to support autobail, but didn't include a lag time to send the orders.
Thus, the order was sent thousands of times before the error was noticed.
For it to have been malicious, the programmer would have had to have contact with the client in question, which is not the case. It was a multi-layered mistake, plain and simple.