Sunday, May 09, 2010
As if trading stocks and shares was not dicey enough!
Money Week: What was the Wall Street wipe-out all about?
We discussed that 'fat finger' is when someone types the wrong number on a computer - a suggested reason for the US stock market going crazy last week; I did not realise that, once a significant drop happens, auto-trading intelligent computers can cascade further drops into a rapid drop or crash...
Should trades happen at a limited speed in order to allow time to investigate sudden market effects?
Is the sensible future of trading a slow down in trading speed?
How else can we avoid the craziness of a savings wipe-out caused by intention or by Mr Fat Finger and his white cat?
Posted by mdmick @ 04:53 PM (530 views) Add Comment
4 Comments
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1. Crunchy said...
Black (nice excuse) boxes should be banned and so should locking out private investors from buying @ the privileged bottom.
A case of fat cats rather than fat finger. Were The Plunge Protection Team asleep at the wheel or very much in the driving seat. :(
We live in fearmongering times where the mongerers always benefit and are never imprisoned even when caught red handed.
Another good trading day Tim and Co? Stock and awe!
2. Cityboy said...
But as was seen the rebound will be just as fast.
The computers will have a target buy-in price for stocks, so as soon as they drop below that lots of buy orders will be placed.
There won't be a wipe-out as this is a blip not a large scale sell-off.
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