Sunday, May 9, 2010

As if trading stocks and shares was not dicey enough!

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 (920 views)
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2 thoughts on “As if trading stocks and shares was not dicey enough!

  • 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!

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  • 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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