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a mini-flash crash - 11/9/2010 7:10:11 PM   
thornhappy


Posts: 8596
Joined: 12/16/2006
Status: offline 		Looks like we had another flash crash, but it was smaller this time around:

"Progress Energy stock was trading at about $44.57 a share, and a dealer at an unidentified brokerage firm had entered a mistaken sell order into a computer that instantly drove the price to $4.57. Dozens of trades were declared void, and after a five-minute halt, normal trading resumed"

Complete article is here.

I'd be for banning all high-speed trading.  Shit, I'd be for removing electronic trading and putting things back in the hands of humans that take a comparatively long time to execute trades.


< Message edited by thornhappy -- 11/9/2010 7:15:29 PM >
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RE: a mini-flash crash - 11/9/2010 8:22:47 PM   
DesFIP


Posts: 25191
Joined: 11/25/2007
From: Apple County NY
Status: offline 		As I recall the crash in '87 was a result of humans not being able to keep up with the work. Trades were not being executed in a timely manner and they shut down the market for three days while they rushed mainframes in to handle the load. Either way, it's not foolproof.

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RE: a mini-flash crash - 11/9/2010 8:38:54 PM   
DarkSteven


Posts: 28072
Joined: 5/2/2008
Status: offline 		Why did they declare the transactions null and void?  WTF are the procedures for doing so?  Please tell me that it's not some gut instinct kind of thing - that is SO open to abuse.

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RE: a mini-flash crash - 11/10/2010 3:39:15 PM   
DesFIP


Posts: 25191
Joined: 11/25/2007
From: Apple County NY
Status: offline 		DS, the computer flags the problem and automatically stops trading. At that point it's pretty much SOP when discovering that it was caused by a mistaken order to return it to where it was when the mistake was made.

Pension funds and such usually buy and sell in lots of 10,000. Which is not enough to cause a crash in the price. However if someone mistakenly added a couple of zeroes, then yes, that huge a dumping of stock will cause the problem.


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RE: a mini-flash crash - 11/10/2010 4:44:06 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		This is amusing to me.

Most here trust their lifes savings to this flash crash risk-

And I am the crazy one-  via stacking real silver.   

Some fat finger will never poof my stack.   It remains in tact.

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RE: a mini-flash crash - 11/10/2010 6:30:26 PM   
Arpig


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Joined: 1/3/2006
From: Increasingly further from reality
Status: offline
quote:

And I am the crazy one-  via stacking real silver. 
Actually there's more to it than just that

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RE: a mini-flash crash - 11/11/2010 5:23:36 AM   
Termyn8or


Posts: 18681
Joined: 11/12/2005
Status: offline 		Here's a scary thought for y'all - what if it wasn't a mistake ?

Think of it and you see why I, who would defy death and not bat an eyelash, avoids the stock market like the plague.

T

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RE: a mini-flash crash - 11/11/2010 6:28:39 AM   
DMFParadox


Posts: 1405
Joined: 9/11/2007
Status: offline
quote:

ORIGINAL: DarkSteven

Why did they declare the transactions null and void?  WTF are the procedures for doing so?  Please tell me that it's not some gut instinct kind of thing - that is SO open to abuse.


Sometimes you do have to gut correct a system from the outside. If you don't you run into the hell of Incompleteness, Godel-style.

If we ever lose our ability to do this, whatever system is running will flip upside down and fuck us all in the ass. With a cat's cock. All spiky and fish-hook.


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