6 ms·

So what is it then?

by kyro 16y ago

So what is it then?

jsm386 16y ago
per mschwar99 below CNBC: Trading Error at Major Firm Blamed for Market Plunge: Sources (Story Developing)
- joe-mccann 16y ago
  Honestly, if you don't know that CNBC is to the financial markets as what the Hee Haw is to the news, then I can't help you. CNBC does NOT know what the cause of this was. The exchanges will come out with some "computer glitch" story or the "fat finger" excuse, but neither of those are true. FWIW, the fat finger excuse is, in a nutshell, some trader accidentally pressing the wrong button on the trading desk. The market was at a technical support level with various moving averages, timelines, etc. all coming into play. Many people had/have stop losses because the market was/is looking due for a correction. Algo/HFT pounced on this, collectively, and thus the massive drop. Trust me, if you are buying into what CNBC tells you, you are really missing the truth...
krschultz 16y ago
"A possible culprit for the drop was a trader error in which someone entered a "b" for billion instead of an "m" for million in a trade. Multiple sources confirmed the report to CNBC and CNBC.com" http://www.cnbc.com/id/36998463 http://www.cnbc.com/id/36998463 That sounds hard for me to believe, but thats one rumor. That wouldn't account for the 10% drop but it might have put initiated the drop and then caused other people (and computers) to panic and sell.
- InclinedPlane 16y ago
  Considering that the volume on Proctor & Gamble trading today not only does not include a spike of a billion shares sold but does not look different from relatively recent trading days, I'd chalk this one up to just a rumor and nothing else.
  - fauigerzigerk 16y ago
    Today's chart does show a spike down to $50 or so, maybe even lower. Go to finance.google.com and look at the intraday chart. It also shows a volume spike, but curiously that's later. [Edit] Actually the stock was down at $39.37 from $61. On normal days PG barely moves at all.
    - mbrubeck 16y ago
      There's undoubtedly a price spike. But to confirm or deny the s/million/billion/ explanation we are looking for a volume spike at the same time.
      - fauigerzigerk 16y ago
        Don't forget all the derivatives linked to the price. You don't see that volume or the losses caused by that.
    - rdtsc 16y ago
      It depend on the resolution of the chart. If the resolution is minute-based, then it could have hit $0 then come back up to $39 within a minute. You wouldn't know. You'd have to have a special high-resolution stock feed.
      - fauigerzigerk 16y ago
        Yes, but I would expect that the low and high for the day shown on the finance websites does show everything down to tick level. Not real time of course.
  - deleted 16y ago
    [deleted]
- FlorinAndrei 16y ago
  "That wouldn't account for the 10% drop" Welcome to the world of positive feedback loops, enjoy your stay.
- danh 16y ago
  Doesn't that kind of software have annoying dialog boxes saying "Are you sure you want cause financial meltdown?"? Or at least a less intrusive "Did you mean 'm'?"? It probably should.
  - jacquesm 16y ago
    I think the first one is actually the better choice. It's really surprising, assuming this is really the cause, that a single letter typo could have such an effect and this has 1) never happened before and 2) not been caught in testing.
    - alttab 16y ago
      More than likely it is a cover story they hope will catch on enough to either cover the panic, or the real reason. I will tell you what though - someone... someone, made a lot of money from this. Inadvertently, but more than likely otherwise.
      - jacquesm 16y ago
        I doubt it's a person that made money. Usually individual investors lose big time when stop loss orders are activated, it's the institutional investors that win.
    - Nekojoe 16y ago
      Stuff like this does happen now and again. One example is putting the wrong value in the wrong fields - http://news.bbc.co.uk/2/hi/business/4512962.stm http://news.bbc.co.uk/2/hi/business/4512962.stm In the above case the trader got the price and number of share fields confused.
  - gaius 16y ago
    No. I have actually worked on such software. When a price comes in - a quote - you have a fixed amount of time to respond before it goes stale, usually a few seconds. It's assumed you know what you're doing and that you want to move quickly. Same as operating any other high-powered machinery. I remember a feature request from a client of ours, we had keyboard shortcuts of k for thousand, m for million and b for billion. They wanted t as well.
- Keyframe 16y ago
  Rumor was that someone at citi fat fingered 16 billion of eminis instead of millions. Even if it were true, it would not cause as much as a dent in it. Market was on a sliding selloff already. My suspicion was that this was a manipulation or HFT gone wild or both. If there weren't that spike down, dow would be at -5% easily, but what happened was -9 and then up to -3.
  - joegaudet 16y ago
    That'd be some mighty fat finger to hit the b and not the m... without hitting the n.
- rdtsc 16y ago
  > That sounds hard for me to believe, but thats one rumor. Would this rumor create insane profits for some? If that is so, those getting the profits should be investigated. Some employee could have been promissed a large sum in a off-shore account to enter a 'b' instead of an 'm'. It should look like an 'oops' to everyone else while a bunch of HFT algorithms could rake in serious profits as everyone's stop-loss triggers get hit. The employee might get fired, but he the pay-off was large enough, he might not need to work ever again.
- 10ren 16y ago
  mille mille vs. mille mille mille? http://news.ycombinator.com/item?id=1321405 http://news.ycombinator.com/item?id=1321405
- daniel-cussen 16y ago
  Don't they enter the number itself, i.e. 1000000 instead of 1000000000. Doesn't seem so easy to get wrong.
- copperred 16y ago
  The Dow Jones is made up of only 30 stocks. A $20 move in P&G would have a large instantaneous impact on the index which could then trigger the algorithms to go nuts.
gorm 16y ago
DON'T PANIC
Keyframe 16y ago
Of course HFT is not the root cause, it might have burned the fuel(stops) when acceleration approached terminal speed. However last tuesday and even before that VIX was on record heights and it pushed even higher today. No fat fingers then. Market is trying to tell us something, obviously. Cumulation was there, this was just a first in a series of explosions triggered by one reason or the other (greece/eu/trichet inaction today).

So what is it then?

by kyro 16y ago

So what is it then?

jsm386 16y ago

per mschwar99 below CNBC: Trading Error at Major Firm Blamed for Market Plunge: Sources (Story Developing)

joe-mccann 16y ago
Honestly, if you don't know that CNBC is to the financial markets as what the Hee Haw is to the news, then I can't help you. CNBC does NOT know what the cause of this was. The exchanges will come out with some "computer glitch" story or the "fat finger" excuse, but neither of those are true. FWIW, the fat finger excuse is, in a nutshell, some trader accidentally pressing the wrong button on the trading desk. The market was at a technical support level with various moving averages, timelines, etc. all coming into play. Many people had/have stop losses because the market was/is looking due for a correction. Algo/HFT pounced on this, collectively, and thus the massive drop. Trust me, if you are buying into what CNBC tells you, you are really missing the truth...

krschultz 16y ago

"A possible culprit for the drop was a trader error in which someone entered a "b" for billion instead of an "m" for million in a trade. Multiple sources confirmed the report to CNBC and CNBC.com" http://www.cnbc.com/id/36998463 http://www.cnbc.com/id/36998463 That sounds hard for me to believe, but thats one rumor. That wouldn't account for the 10% drop but it might have put initiated the drop and then caused other people (and computers) to panic and sell.

InclinedPlane 16y ago
Considering that the volume on Proctor & Gamble trading today not only does not include a spike of a billion shares sold but does not look different from relatively recent trading days, I'd chalk this one up to just a rumor and nothing else.
- fauigerzigerk 16y ago
  Today's chart does show a spike down to $50 or so, maybe even lower. Go to finance.google.com and look at the intraday chart. It also shows a volume spike, but curiously that's later. [Edit] Actually the stock was down at $39.37 from $61. On normal days PG barely moves at all.
  - mbrubeck 16y ago
    There's undoubtedly a price spike. But to confirm or deny the s/million/billion/ explanation we are looking for a volume spike at the same time.
    - fauigerzigerk 16y ago
      Don't forget all the derivatives linked to the price. You don't see that volume or the losses caused by that.
  - rdtsc 16y ago
    It depend on the resolution of the chart. If the resolution is minute-based, then it could have hit $0 then come back up to $39 within a minute. You wouldn't know. You'd have to have a special high-resolution stock feed.
    - fauigerzigerk 16y ago
      Yes, but I would expect that the low and high for the day shown on the finance websites does show everything down to tick level. Not real time of course.
- deleted 16y ago
  [deleted]
FlorinAndrei 16y ago
"That wouldn't account for the 10% drop" Welcome to the world of positive feedback loops, enjoy your stay.
danh 16y ago
Doesn't that kind of software have annoying dialog boxes saying "Are you sure you want cause financial meltdown?"? Or at least a less intrusive "Did you mean 'm'?"? It probably should.
- jacquesm 16y ago
  I think the first one is actually the better choice. It's really surprising, assuming this is really the cause, that a single letter typo could have such an effect and this has 1) never happened before and 2) not been caught in testing.
  - alttab 16y ago
    More than likely it is a cover story they hope will catch on enough to either cover the panic, or the real reason. I will tell you what though - someone... someone, made a lot of money from this. Inadvertently, but more than likely otherwise.
    - jacquesm 16y ago
      I doubt it's a person that made money. Usually individual investors lose big time when stop loss orders are activated, it's the institutional investors that win.
  - Nekojoe 16y ago
    Stuff like this does happen now and again. One example is putting the wrong value in the wrong fields - http://news.bbc.co.uk/2/hi/business/4512962.stm http://news.bbc.co.uk/2/hi/business/4512962.stm In the above case the trader got the price and number of share fields confused.
- gaius 16y ago
  No. I have actually worked on such software. When a price comes in - a quote - you have a fixed amount of time to respond before it goes stale, usually a few seconds. It's assumed you know what you're doing and that you want to move quickly. Same as operating any other high-powered machinery. I remember a feature request from a client of ours, we had keyboard shortcuts of k for thousand, m for million and b for billion. They wanted t as well.
Keyframe 16y ago
Rumor was that someone at citi fat fingered 16 billion of eminis instead of millions. Even if it were true, it would not cause as much as a dent in it. Market was on a sliding selloff already. My suspicion was that this was a manipulation or HFT gone wild or both. If there weren't that spike down, dow would be at -5% easily, but what happened was -9 and then up to -3.
- joegaudet 16y ago
  That'd be some mighty fat finger to hit the b and not the m... without hitting the n.
rdtsc 16y ago
> That sounds hard for me to believe, but thats one rumor. Would this rumor create insane profits for some? If that is so, those getting the profits should be investigated. Some employee could have been promissed a large sum in a off-shore account to enter a 'b' instead of an 'm'. It should look like an 'oops' to everyone else while a bunch of HFT algorithms could rake in serious profits as everyone's stop-loss triggers get hit. The employee might get fired, but he the pay-off was large enough, he might not need to work ever again.
10ren 16y ago
mille mille vs. mille mille mille? http://news.ycombinator.com/item?id=1321405 http://news.ycombinator.com/item?id=1321405
daniel-cussen 16y ago
Don't they enter the number itself, i.e. 1000000 instead of 1000000000. Doesn't seem so easy to get wrong.
copperred 16y ago
The Dow Jones is made up of only 30 stocks. A $20 move in P&G would have a large instantaneous impact on the index which could then trigger the algorithms to go nuts.

gorm 16y ago

DON'T PANIC

Keyframe 16y ago

Of course HFT is not the root cause, it might have burned the fuel(stops) when acceleration approached terminal speed. However last tuesday and even before that VIX was on record heights and it pushed even higher today. No fat fingers then. Market is trying to tell us something, obviously. Cumulation was there, this was just a first in a series of explosions triggered by one reason or the other (greece/eu/trichet inaction today).