"Fat Finger Error" the phrase (and excuse) du jour. Repeat until you no longer question it.

[underpants]

Fat Fingers Cause Panics
http://blogs.forbes.com/greatspeculations/2010/05/06/fat-fingers-cause-panics/

The Overnight Report: Foolish ECB And A Fat Finger
http://au.ibtimes.com/articles/20100507/the-overnight-report-foolish-ecb-andfat-finger.htm

CNBC: A Citigroup Trader Made The Big Fat Finger Error
http://www.businessinsider.com/cnbc-a-citigroup-trader-made-the-big-fat-finger-error-2010-5


Sources Say Possible Trading Error at Citigroup to Blame
http://abcnews.go.com/Business/dow-jones-dives-european-debt-scare-shakes-us/story?id=10576136

[SemiCharmedQuark]

1. Like I said in the other thread, as totally ridiculous as it sounds, this has happened before

Japan in 2005.

I'm not sure what happened this time, but the idea isn't *totally* out there.

http://www.msnbc.msn.com/id/10394551

[girl gone mad]

24. No, it's pretty much totally out there.

Listen to this S&P pit trader in action during the crash

http://www.zerohedge.com/sites/default/files/Market%20Crash.mp3

No way this was being caused by one fat finger trade. No way.

[madinmaryland]

2. I think the guy must have thought someone said it was worth a brazillion dollars!

[underpants]

3. :-)

[Sanity Claws]

4. What do you think the real story is?

I'm not arguing with you. I'm just trying to figure out what other explanations there could possibly be

[underpants]

7. No one oversees one guy entering an order?

if they don't then they aren't very smart. Mistakes happen (as posted above) but hey they are the ones with the fancy degrees and the "Talent" that has to be retain, right?

[girl gone mad]

28. Algorithmic Trading and Price Volatility..

I do not agree with Rajiv that the decline may have been "triggered" by an erroneous trade, because that trade was not even entered until well after the sell-off was underway. Otherwise, his analysis is good.

Algorithmic Trading and Price Volatility
http://rajivsethi.blogspot.com/2010/05/algorithmic-trading-and-price.html

Yesterday's dramatic decline and rapid recovery in stock prices may have been triggered by an erroneous trade, but could not have occurred on this scale if it were not for the increasingly widespread use of high frequency algorithmic trading.

Algorithmic trading can be based on a variety of different strategies but they all share one common feature: by using market data as an input, they seek to exploit failures of (weak form) market efficiency. Such strategies are necessarily technical and, for reasons discussed in an earlier post, are most effective when they are rare. But they have become increasingly common recently, and now account for three-fifths of total volume in US equities:

Algorithms have become a common feature of trading, not only in shares but in derivatives such as options and futures. Essentially software programs, they decide when, how and where to trade certain financial instruments without the need for any human intervention... markets have come to be dominated by “high-frequency traders” who rely on the perfect marriage of technology and speed. They use algorithms to trade at ultra-fast speeds, seeking to profit from fleeting opportunities presented by minute price changes in markets. According to Tabb Group, a consultancy, algorithmic and high-frequency trading accounts for more than 60 per cent of activity in US equity markets.

This is a recipe for disaster:

In a market dominated by technical analysis, changes in prices and other market data will be less reliable indicators of changes in information regarding underlying asset values. The possibility then arises of market instability, as individuals respond to price changes as if they were informative when in fact they arise from mutually amplifying responses to noise.

Under such conditions, algorithmic strategies can suffer heavy losses. They do so not because of "computer error" but because of the faithful execution of programs that are responding mechanically to market data. The decision by Nasdaq to "cancel trades of 286 securities that fell or rose more than 60 percent from their prices at 2:40 p.m." might therefore be a mistake: it protects such strategies from their own flaws and allows them to proliferate further. Canceling trades can be justified in response to genuine human or machine error, but not in response to the implementation of flawed algorithms.

[Rex]

5. It is so silly, everyone saw the impossible happen however improvable

it was and wants to blame something stupid. Like a human hand? Wait...invisible hand, course correction...holy hell it works!

[underpants]

8. Ha!

the Fat Finger of the Invisible Hand

[Rex]

11. When all other truths prove wrong, the most improvable or obvious

must be the truth. And we saw it in our lifetimes! Mark this day. :crazy: Computers rulz us now!

[Nikki Stone1]

6. Sorry, I don't buy it.

Some entity trashed stock values and picked up bargain basement values.

[underpants]

9. Someone made a boatload on this

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=8287024&mesg_id=8287024

Accenture (ACN) opened at about $42, then traded down to one penny at one point. The stock ultimately closed at $41.09

[Nikki Stone1]

13. It sounds like a hit

Any other info on this?

[underpants]

17. YES! we found out the talent at Citigroup with the "fat finger"

[Nikki Stone1]

22. LOL!!!!!!!!!!!

:D

[Statistical]

19. However that boatload was spread out over thousands of buyers.

A single seller sold off billions worth of stock from $41 down to $0.00.

So while money changed hands the person making the drive down LOST a boatload.

Not really inspiring for some massive conspiracy.

A brokerage with way too much power and money fucked up, lost a tremendous amount of money, and almost tanked the market.

[Yeahyeah]

10. They always give us the fat finger.

[pscot]

12. The Fickle Finger of Fate

There used to be an award for this sort of thing.

[Sanity Claws]

14. Laugh In

I'm old enough to remember that show

[RKP5637]

16. +1, n/t

[tinymontgomery]

15. Local faux news

local faux news is trying to connect the Greece problems with the run.

[RKP5637]

18. I'm surprised they haven't blamed Obama yet... n/t

[gravity]

20. It is the most plausible explanation

and the markets reacted exactly as they should in such a situation.

[girl gone mad]

23. Not only is it not plausible..

it's demonstrably false.

The market had already been in pure sell mode for 20 minutes, and was down 5%, by the time the typo trade was supposedly entered.

Yesterday's action appears to have been the predictable and predicted outcome of massive deleveraging and illiquidity wrought by profligate high frequency trading.

[Initech]

21. "The fingers you have used to dial this phone are too fat. To obtain a special dialing wand..."

"Please mash the keypad with your hand."

[boston bean]

25. Make up the most unbelievable explanation and it will be believed because

no one would ever believe they could get away with such an unbelievalbe explanation.

[bananas]

26. The Fickle Finger of Fat

http://www.tvacres.com/awards_booby_flying.htm



Flying Fickle Finger of Fate Award - Called the Rigid Digit, the Winged Weenie, Wonderful Wiggler, Friendly Phlange, and the Nifty Knuckle, this weekly satirical award was presented by comedians Dan Rowan and Dick Martin on the weekly comedy variety series ROWAN & MARTIN'S LAUGH-IN/NBC/1968-73 for the dumbest/craziest news item of the week. Gold/Silver in color, the award was a "hand" mounted on a trophy base. Its index finger adorned with two small wings rotated in a "Whoopee!" circular motion.

Recipients of this "uncoveted" award included then Los Angeles Chief of Police, Ed Davis who suggested that "gallows" be put in all airports for the hijackers so they could be hung on the spot; the City of Cleveland for their Cuyahoga River (It caught fire due to its high pollution levels); and a Wonderful Wiggler went to William F. Buckley for his philosophy "Never clarify tomorrow, what you can obscure today." Top awards went to the Pentagon. They won five times.

http://en.wikipedia.org/wiki/The_Fickle_Finger_of_Fate



The Fickle Finger of Fate (also known as El Dedo del destino and The Cup of St. Sebastian) is a 1967 comedy film directed by Richard Rush, produced by Sidney W. Pink, and starring Tab Hunter. Hunter stars as a clumsy businessman who accidentally gets wrapped up in a plot of intrigue while on a trip to Spain.

The film was distributed in America by Troma Entertainment.

Tagline: It's James Bond on acid!

[City Lights]

27. Was the trader typing with his big toe?

If not, I don't see how anyone can claim "fat finger" error. Typo, yes. Fat toe error, yes. Fat finger error, no.