Dow plunges 1,000 points, possibly due to PEBCAK

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38 Responses to “Dow plunges 1,000 points, possibly due to PEBCAK”

  1. friendpuppy says:

    Four words which scare me: Highly Intelligent Trader Bots. It’s coming.

  2. ultranaut says:

    Algo trading, ftw

    According to the experts, what happened today is really fucking weird. I recall when source code for Goldman’s HFT system leaked they were claiming it could be used to manipulate the markets like this.

  3. Michael Smith says:

    I know its out there because I heard its soul breathing on the wires.

    -John Varley, Press Enter:
    1984.

  4. Anonymous says:

    Im sure that Bin Laden had “hellions” in stocks here in the US.

    stock market

  5. wiredfool says:

    Looking @ the apple results for today on google finance, there was a sale for 216.04 on 216.04k shares volume. There was a lot of stuff happening today that didn’t look ‘real’.

  6. WORDISBOND says:

    Sorry. Lesson learned.

  7. ritholtz says:

    Just an FYI — there are no “B” and “M” keys for order entries on trading desks (other than the regular keyboard keys).

    The most you have is an automatic “000″ key

    No one actually types out “Sell one million three hundred and forty five thousand shares.”

    That would be 5 keys instead: 1 – 3 – 4 – 5 – 000.

    Besides, even if somebody accidentally sold 1 – 000 – 000 – 000 instead of 1 – 000 – 000, it should not have sent the market down 1,000 points.

    This was more likely a combination of several other factors — High Frequency Trading plus a glitch, plus general market fears, The Dow was already down over 300 points when the collapse and snapback happened.

  8. Felton says:

    Hey, at least he didn’t type g for gajillion

    Speaking of which, whatever happened to that idea to make “hella-” the next prefix for really large numbers? In the future, we could be losing money by the “hellions.”

  9. WORDISBOND says:

    I like the follow-up story from the Weekly Coitus on this. Fool me once, shame on me. Fool me twice… wait, what was the question again? Here’s the story: http://weeklycoitus.co.nz/?p=1214

    • Antinous / Moderator says:

      WORDISBOND,

      Five out of your last six comments have linked to the same website. Please stop.

  10. michael holloway says:

    Ever seen a ball bounce? Check out this Wall Street Journal Chart of the DJIA over ten years, it defaults to 1 year – click on the 1 Decade icon top left scroll.

    ‘m’ instead of a ‘b’ my a**.

    http://online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_h_dtabnk&symb=DJIA

    • dculberson says:

      I’ve never seen a ball bounce like that.

      • michael holloway says:

        My point is that the market is correcting down despite every effort to prop it up, I think by the fall of ’10 the ‘ball’ will bounce to the low in ’09. Elliot Wave theory says these trends happen in three’s. So by 2011 expect a global depression.

  11. fnc says:

    This is why you never just start tapping the ‘y’ button without reading all the prompts!

  12. SkullHyphy says:

    OK, you get ready w/ the “billion order” and I’ll swoop in on some collaterally damaged stocks. Isn’t it great to live in such an advanced society?

  13. Felton says:

    So how is Mr. Buttle, anyway?

  14. Anonymous says:

    User error, my ass!

    If this had been a genuine liquidation panic, trading volume (as in the 2008 crash) would have gone through the roof. In fact, during the precipitous midday plunge, trading volume on most stocks was non-existent.

    Take a look at the intra-day chart of Procter & Gamble (PG on NYSE). Astonishingly, volume disappeared during the crash and at one point during the trading session, this eminently stable company lost roughly 35% of its market capitalisation!

    Clearly some very large players orchestrated this selling panic via derivatives, and when stocks got whacked, these crooks scooped up bargains in one of the biggest heists in financial history!

  15. Marcel says:

    A typo.

    Just a fecking typo.

    You know what?! The modern day terrorist will be a stock broker.

    • mdh says:

      will be?

      is.

      “According to multiple sources, a trader entered a b for billion instead of an m for million in a trade possibly involving …. steaming turds

  16. Glossolalia Black says:

    The curse of the Pudgy Finger.

  17. Teller says:

    That may or may not have happened – but this did: “Selling accelerated late in the day due to a wave of automated sell orders that turned an ugly drop into a full-blown market washout.”

    • Nadreck says:

      I my experience, there is a lot to suggest that big traders use their knowledge of the existence of those automated stop loss orders to make “mistakes” like this all the time so as to give themselves great buying opportunities. In Canada no one regulates or guards against this (or any other stockmarket swindles when you get right down to it) but I don’t know about the S.E.C. in the States. Statistical analysis probes should be an effective response but is there any will to use them?

  18. Anonymous says:

    Wasn’t this part of the plot of a Tom Clancy novel?

  19. hadlock says:

    Any lie to keep the teetering global economy from completely collapsing.

  20. GraemeM says:

    technology makes our life easier, until it takes over!

  21. ironix says:

    Nadreck, having done index futures trading, I can fully agree with this assessment. I can’t count how many times a stop-loss order was executed by the index simply dipping .25 below the stop-loss point and then jumping way up.

    Think of it this way, if you are a large brokerage firm, you have access to all the data that covers everything that your customers are trading, where their stop-loss orders are set, where their buy orders are set, how much they’re on margin (used to force a position closed), etc.

    The market is a casino and the house always wins, except in this case, they also cheat.

  22. scifijazznik says:

    Boy, I’d love to be a fly on the wall when this guy’s boss knocks on his door…and offers him a bonus.

  23. Anonymous says:

    Could be worse – if you’re British, a “billion” may be three orders of magnitude larger than our American billion.

    • truncat says:

      According to Wikipedia, there’s no longer a difference between a British and American billion: “In 1974, the government of the UK switched to the short scale, a change that is reflected in its mass media and official usage. Although some residual usage of the long scale continues in the UK, the phrases British usage and American usage are no longer accurate nor helpful characterizations.” http://en.wikipedia.org/wiki/Long_and_short_scales

  24. Phikus says:

    There have been worse

  25. arborman says:

    So much for resilience in our financial system. Automated sell orders? Insanity.

    Might be a good time to pick up a few solid stocks.

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