Stock Crashed Caused By Human Mistake?

I was reading an AP report that talked about the possibility that a Trader working for CitiGroup erroneously entered a futures trade of 16 Billion instead of 16 Million – a ‘small’ difference. And this may have led to an automated sell of.

The Nasdaq at one point may have also listed erroneous stock prices on Proctor and Gamble (PG) and possibly other stocks as well (unconfirmed at this point – but speculation abounds. NASDAQ did also ‘cancel’ trades made during a certain period of time. Now THAT is a bit telling, isn’t it?

Assuming this whole thing was a false sell off – I feel sorry for the people who got hurt by this!

You have to admit, if the market falls by 1,000 points and then rebounds immediate by 650 points – ‘Something’ does not seem right!

Comment below if you agree or disagree or have something to add! Just say something to let me know you are ALIVE!

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  • http://replacementcarafe.net Glen Tavel

    I think we’re going to see more and more of this over time as stock traders use various formulas to automatically buy or sell. These probably work within the normal range of activity, but when something out of that range (stock error, etc.) happens, they can cause things to go bonkers.

    I don’t have much stock (retirement account), but just go with the SP500 – I don’t know enough to succeed by buying and selling rapidly, and at my level, the fees would take all my profits.

  • http://allthingspondered.com Dave

    Glen, that is a good point indeed. That is a strategy that many employ. Anyone can do this by purchasing an S&P 500 Tracking stock. Very good point you have there.

    For me, I think you don’t have to trade every day. You just have to have a sense about where a company is going and if they are likely to get there. But some would still call that gambling…

  • http://www.totallycostumes halloween costumes

    Naturally there is always a chance of human error. They should be looking at having fail-safes in place to keep this from occurring. I mean Windows 7 will ask me if I “really” want to do that, but there computer doesn’t ask “are you sure thats supposed to be 16 Billion?”




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