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Stock Market Sell-Off Might Stem From Trader's Fat Finger

Posted by timothy on from the knight-of-the-order-of-magnitude dept.

s122604 points out a CNBC story according to which "the catalyst for today's extraordinary price swing (at one point the Dow lost almost 9 percent in less than an hour) may have been because a trader entered a 'B' for billions instead of an 'M' for millions on a trade of Procter and Gamble: 'According to multiple sources, a trader entered a "b" for billion instead of an "m" for million in a trade possibly involving Procter & Gamble, a component in the Dow. (CNBC's Jim Cramer noted suspicious price movement in P&G stock on air during the height of the market selloff).' Unbelievable there are no safeguards to protect against this."

3 of 643 comments (clear)

  1. Institutional Traders Don't Enter Trades Like That by Knara · · Score: 5, Interesting

    It may have been a system problem, that's quite possible. But institutional traders don't type in "b" or "m" next to some number they type in of stock they want.

    But even in some strange world where they did, entering in a standard lot quantity that required an "m" (much less a "b") for the stock that is suspected to be the issue at hand (PG), would result in an order that exceeded the 30-day avg vol for PG by a factor of 10.

    And that's not even considering that the firm's risk management would, in theory, have caught the issue already.

    I am, obviously, doubtful of this explanation.

  2. Re:SELL! by tgatliff · · Score: 5, Interesting

    It doesnt take a genius to figure out that the "typo" theory is BS... In 2008, it was a "computer fault"... Deflation is still very much in control at the moment, and it appears that we have only delayed it. As greece and many other sovereigns start to default on their debts, we will see the leg down... Acceptance is a b&^%*& sometimes...

  3. I think you guys are missing the actual point by Anonymous Coward · · Score: 5, Interesting

    What's being talked about here isn't the general decline in the market today, but a very suspicious "blip" that occurred in a huge number of stock prices at 2:45 EST, followed by immediate recovery.

    Look at the blip:

    Adobe
    Google
    Westlake Chemical
    Cabela's Incorporated
    Apple
    Microsoft
    Titanium Metals
    Fidelity IIS

    This shit is across the board, with very few exceptions. You try explaining how something like that happens apart from some major fuckup somewhere.