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Computer Problem Caused Price Errors on NASDAQ
buckthorn writes "An article running on Yahoo News states: 'A computer problem at an unidentified stock trader caused erroneous, exaggerated prices -- some as high as $950 per share -- to be posted to the Nasdaq Stock Market Friday morning for 1,680 different stocks, a spokeswoman for the Nasdaq said.'"
Good afternoon gentlemen. As you are all no doubt aware, I have perfected a method of manipulating the various stock exchanges throughout the world. You received proof of this this morning, as relatively worthless Nasdaq stocks such as Maxco, Inc. and J.W. Mays Inc. traded briefly at hundreds of times their real value. I believe my latest caper, which I've puckishly dubbed 'Operation Stocking-Stuffer', is certainly worthy of your attention...
You see, gentleman, when 'Operation Stocking-Stuffer' is deployed in earnest, all stock exchanges will be laid waste...all trade will effectively cease, and global civilization itself will crumble...that is...unless you pay me...
Gentleman, you have my demands...peace out.
____
~ |rip/\/\aster /\/\onkey
Sell! Sell!
SELL SELL SELL SELL !!!!!
THIS is the reason I try to stay in bed on Friday the 13th.
liqbase
I call do-over!
Shop as usual. And avoid panic buying.
A problem where technology caused wildly erroneous stock prices? I liked it the first time around when it was called the dot com bubble. The parties were better.
Was first post on a non-duped Slashdot story on part of the demands?
http://en.wikipedia.org/wiki/Signature_bloc
Did the little PI symbol for the Praetorians show up on the NASDAQ ticker, too?
[
Just as long as the price of this stock wasn't artificially manipulated by $950 per share, we could have been in hot water.
- Just my $0.02, take with a grain of salt, your mileage may vary.
Those 100 SCOX shares really paid off!
W00t!!
For example, Berkshire Hathaway* trades at nearly $90,000 per share. Saying that some shares were trading at $950 per share does not indicated the magnitude of the problem without knowing which shares those were. * I know Berkshire isn't listed on the Nasdaq, but others like CheckPoint trade in 3 digits so I'm sure $950 isn't unheard of on the Nasdaq.
It was either a programming error (human) or an operator error (human) or some other cause. OK, clearly hardware faults can cause data corruption, but this is really pretty rare and it's hard to believe that a hardware fault could cause such a widespread fault.
The real "Libtards" are the Libertarians!
I thought this was why scox went up, but when we looked at the time it went up, it didnt conside with the error. Oh well, guess its just a pump/dump for monday.
Why is there a PHP icon at the top of the page, which should be a Firefox icon.
This is not the sig you are looking for...
I am working for local internet shopping centre. Most prices are generated automatically based on wholesale prices and competitor retail prices. Sometimes glitches in this process lead to funny prices on website. When this happens sales reps are ready to kill us IT guys.
Those transactions, which were made 15 percent above or below the previous day's closing price, will be "broken" -- the buyer will get his or her money back, and the stock will revert to the seller.
...
I wont let them. They can't take it back.... right?
What the hell is banging on my door? They are insi#%*#&)^*!&$NO CARRIER
This slashdot-related signature is a stub. You can help kihjin by expanding it.
I thought it was just a good 1Q report on some of my holdings. Hope they don't send me to the federal pound-me-in-the-ass prison like Martha :(
Michael Bolton: I must have put a decimal point in the wrong place or something. Shit. I always do that. I always mess up some mundane detail.
Rule #1 -- Politics always trumps technology.
"A metal heat-treating company that normally trades between $3 and $4 per share, was briefly quoted at $951.47 Friday morning. It later traded at $4.10 per share." There IS money in the stock market. Invest $40, sell for $9510. Profit: $9470! Cheers and congratulations.
9/11: Never forget it was a false-flag operation
Just look at SCO's share prices.
Damnit, I could have made some money! Except that my funds are tied-up in a Nigerian opportunity at the moment. But boy-o-boy is that opportunity gonna make me rich! Rich! I say!
instead of Red Hat today.
...
Oh, wait, I would have made even more
Darn.
-- Tigger warning: This post may contain tiggers! --
Microsoft blames IE Share loss on NASDAQ computer errors
yes, the windows-powered machine made a calculation error, inflating MSFT as much as 900%...
Well, that's also why there's a 3 day grace period from the order to the close.
It's not just there to allow for slow paper to move, but there to allow rollbacks.
-- Tigger warning: This post may contain tiggers! --
working for a large bank on a program trading system (yes it runs on linux) automating orders on behalf of clients this is the sort of thing that gives us the cold shivers.
one coding error can suspend the trading of a major stock, or worse as in this case move the price miles from where it should be.
theoretically the exchanges shouldn't allow you to do this. some work by suspending automatically and restarting with an auction, some work by suspending it. locking you out and fining you loads of cash. this costs you big as nobody else can trade that stock through you for a while. thats really expensive - the lost business.
when your taking in client orders and trading them automatically and you recieve orders via say FIX.
yes you do lots of checks with vol, movement on the day, movement since the close, momentum etc.
but how well do these checks work when your market data feed has gone down (or worse gone wrong) or even gone down, but the heartbeat process is still pinging so you think you have a good price?
but i guess sometimes we get it wrong just like anywhere else. this is just a rather high profile and embarrassing example.
still they won't do it again (for a while)
open4free ©
This issue was actually caused by trading software provider Trading Technologies (who are currently suing all of their clients due to supposed patent violations). It was caused by a bug in their automatic spread trading module, which caused it to run amok on one of their client's trading consoles.
So you're telling me that as long as you're a trading house with a direct tie-in to NASDAQ, there's no input validation or sanity checking done? I realize its probably too much to ask that there be a moderate amount of human oversight given the extreme amount of data passing through the lines. But given the importance of accurate data, you'd think NASDAQ would put better checks and balances into their systems.
Quick, sell!
1.0E+666$/share open4free ©
In the extended hours markets, some traders post bids or offers at outrageous prices, hoping someone will make a mistake. They will offer to buy some stock for $0.02 per share or sell some stock for 200.00 per share (that normally trades $20 a share) in hopes that someone screws up. The low cost of participating in an electronic market makes it easy to post these orders.
The real lesson is that stocks don't really have "a price" in a traditional sense. (At best, the price on the last transaction serves as a proxy, but is no guarantee of getting that price in the future). In reality, stocks have both a bid and an ask price. For thinly traded stocks (especially in the off-hours), the bid-ask spread can be very very large.
Buyer (and seller) beware.
Two wrongs don't make a right, but three lefts do.
It was etrade
OMG! That is funny!
Today's public channel => $950 per share.
Many hours later, it will be $4.10 per share.
Today's private channel => $2.50 per share.
Where is the trap? (tm)
If they're in such a mad rush that they screw up stock ticker prices, maybe we should slow things down a bit. There is just too much going wrong with technology these days, like hackers stealing personal information from Choicepoint, or Indians stealing hundreds of thousands of dollars from Bank of America account holders. The difference between programming and engineering is that engineering is intended to get things right, whereas programming is done by high-school dropouts who don't care. Let's focus on engineering from now on, shall we?
wtf the higest stock i have ever seen was like 250 or something
is that really 83 000 dollars?
shes so hot!
:(
:)))))
when can i go home
guess what to do
after some poking around, I believe the unidentified trader was scotttrade. if you use the ticket on their website, it's the only one I've found that reports the incorrect highs (such as maxco being traded for $951.47). you can find other ones if you look hard enough...
(Debt of Honor lives!)
-- My Sig is a P228.
I'm posting this anonymously for obvious reasons. A friend of mine helped develop software used in a north american electronic securities trading system. He mentioned various timing difficulties and synchronization errors he was trying to work around, and how finally he fixed most of the race conditions with random sleep statements. Whether or not that code got into production, I don't know
Step 1: Buy worthless penny stock
Step 2: Await computer error
Step 3: Profit!!!1!
In Soviet..erm, I'd like to see a beow...uh, I for one, welc... oh, just forget it.
Believe you me, the NASDAQ is one of the only major exchanges I mildly trust precisely because it is electronic. Other major exchanges, notably the NYSE, involve human floor traders gathering around posts and barking out bid and ask prices.
Do you have any idea how crooked stock trading through middlemen is? There are a thousand ways the retail investor and small trader gets screwed. For instance, market makers are definitely not impartial and favour their own trades ahead of clients'. You can not even catch the fraud the occurs. There are about a dozen NYSE market specialists that are charged with fraud every year.
There is absolutely no reason to involve humans in the securities trading process any more. None! The rampant fraud can be easily avoided. When things like this are publicized, I almost wonder if it's got some bias in favor of the human trade specialists who make trading floor operations tick. They're useless middlemen, profiting from spreads and leverage.
Electronic trading is the only way to go. When an exchange switches to electronic, you should see that as a sign of quality and a commitment to do away with the fraud that EVERY insider knows is a standard mode of operation in stock trading.
This is not a mundane detail, Michael!!!
I paid almost $250/share for VA Linux back in 2001 and look, it's practially worthless now.
I demand a refund.
Stupid computers
Beauty is in the eye of the beerholder.
But did any trades actually take place at that price or was it just listed as the current price?
If I had been interested in Maxco, Inc. stock, I would be watching the price and waiting for it to hit around $4 before buying, or perhaps be willing to buy it up to $5, if I thought it was going to keeep going up.
If it was at $951, I wouldn't buy it, since that's orders of magnitude higher than I expect it to be in a week.
I would assume wall street traders similarly limit the price when they buy.
(I do pity the guy who set his Ameritrade up for "buy at market price" though...)
Money gets very pushy, I have noted.
emt 377 emt 4
I was actively involved in todays "mess." The root cause of the problem was related to the prices which were using for electronically making markets in stocks which did not have any trades yesterday. When there is no activety for a stock in a day, the price quote is always 0 x 1900. The median of these two numbers is 950. A firm who makes markets in ALOT of stocks, accidentally changed their systems to use the midpoint at yesterdays close instead of the normal final print. So they started putting up quotes at 950.00 thus causing the problem. All the trades 15% out of the market from the previous close were broken. The money wasn't "removed" from peoples accounts since the proceeds or loses from a buy or sale of stock aren't realized for atleast 3 days.
I was on the other end of this mess and yes, that is what happened. Not a good day.
There is a branch of investing called technical analysis. What people who follow it do is use various formulas to look for stocks that are moving. These people intentionally know nothing about the stocks they are trading.
Technical analysis works because it assumes that others are doing their homework, and so you can follow their lead and get almost as much gain as they do. When prices jump as happened in this case, technical analysis would say buy (depending on the formula of course) assuming someone knows what they are doing buying that high.
I personally do not recommend technical analysis. However it is a valid technique to invest with, so long as it isn't a major part of your portfolio.
Are we now all ready to acknowledge the fact that money is nothing more then a set of bounding rules? It was never introduced to be taken advantage of, like the first world is doing everyday. I believe any system will break down eventually, if it's not used in harmony with the idea the founders of that system had in mind. Can't realy imagine people back in the days would be proud now, seeing people die without food/water, while others whine about their stock-value.
Hey, I resemble that remark!
(ok, I just graduated yesterday so I don't quite fit the dropout bit, so sue me)
I work for a competitor. I guess we'll be seeing a few new resumes making the rounds come Monday morning - better remind our recruiters to drop anyone who worked with TT.
No no, what he actually said was "The power of g++ compiles you!".
Time flies like an arrow. Fruit flies like a banana.
Noooo feckin' wayyy !!!
... The Exorcist
...
I literally just walked in to read some Slashdot after watching
All I need now is Maureen O'Gara running backwards up the stairs on all fours
-- "It's not stalking if you're married!" My Wife.
uhuhuhuh sounds a lot more like sobbing when you say it aloud. Do you miss your home town? Mwahahahaha. Ha.
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Wouldn't be surprised at all if this says something about what they use on the inside too...
I think this is unjust, personally. I think stock exchanges should never cancel erroneous trades, because that penalises those who took advantage of errors, but does not penalise the source of the error. The source of the error should be penalised, on the "it's your fault, you pay for it" principle - which would encourage greater care in the development of trading software.
As a bonus, big corporations might go bust if they didn't implement proper checks, which would be highly amusing to me.
Female Prison Rape in NY
The person does get penalized, they get charged a fee for causing a "clearly erroneous trade."