So it turns out that, maybe, Thursday's sickening drop in the stock market might be due to a goof by a trader who pushed the wrong key.
- Stock futures rise a day after market turbulence - Stephen Bernard/AP/Buffalo News
A computerized sell-off, which might have been triggered by a simple typographical error, sent the Dow Jones industrial average down by a record nearly 1,000 points in about 30 minutes Thursday afternoon. The market started to steady itself and regained two-thirds of that loss before the end of trading.
- Surge of Computer Selling After Apparent Glitch Sends Stocks Plunging - New York Times
The glitch that sent markets tumbling Thursday was years in the making, driven by the rise of computers that transformed stock trading more in the last 20 years than in the previous 200. ...
“We have a market that responds in milliseconds, but the humans monitoring respond in minutes, and unfortunately billions of dollars of damage can occur in the meantime,” said James Angel, a professor of finance at the McDonough School of Business at Georgetown University.
- How a B sent markets into freefall - Canadian Press/Hamilton Spectator
A trading glitch, dubbed a fat-finger trade, was suspected of sparking the sell-off. CNBC and other financial news outlets reported that a Citigroup trader may have erroneously substituted "billion" for "million" in a large sale. And computer-generated trading may have made matters worse.
- How a Typo Crashed the Market - Randall Lane/The Daily Beast
That’s what happens when machines control your world, and when your fate rests on whether some trader, under second-to-second pressure, clumsily types the wrong thing into those machines.
- Stock plunge raises alarm on algo trading - Reuters
High-speed trading, which uses sophisticated computer algorithms based on specific scenarios to automate transactions at speeds in the millionths of a second, now accounts for about 60 percent of U.S. equity volume.
"The potential for giant high-speed computers to generate false trades and create market chaos reared its head again today," Senator Edward Kaufman said in a statement.
"The battle of the algorithms -- not understood by nor even remotely transparent to the Securities and Exchange Commission -- simply must be carefully reviewed and placed within a meaningful regulatory framework soon."
- What Caused the Plunge? - Mark Gimein/The Big Money
Here is one truth about reporting on the stock market that has held since time immemorial: Journalists offer rational explanations, and sometimes the markets make a mockery of those explanations. In minutes. Never has that been as true as today. Under ever more pressure to explain the markets in real time, the business press showed itself to be just as flummoxed as anyone.
-- George Pyle/The Muffalo Bews