Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Stock Market Sell-Off Might Stem From Trader's Fat Finger

timothy posted more than 4 years ago | from the knight-of-the-order-of-magnitude dept.

Bug 643

s122604 points out a CNBC story according to which "the catalyst for today's extraordinary price swing (at one point the Dow lost almost 9 percent in less than an hour) may have been because a trader entered a 'B' for billions instead of an 'M' for millions on a trade of Procter and Gamble: 'According to multiple sources, a trader entered a "b" for billion instead of an "m" for million in a trade possibly involving Procter & Gamble, a component in the Dow. (CNBC's Jim Cramer noted suspicious price movement in P&G stock on air during the height of the market selloff).' Unbelievable there are no safeguards to protect against this."

Sorry! There are no comments related to the filter you selected.

SELL! (5, Insightful)

Skyshadow (508) | more than 4 years ago | (#32117702)

I suspect that I speak for everyone with their retirement money and/or savings invested in the markets when I say: HO-LY SHIT.

Frankly, I was more comfortable with the concept that the DOW could drop 1000 points in one afternoon due to some obscure overseas debt concerns than I am the idea that the DOW can drop 1000 points in one afternoon because of a fucking typo. I realize that markets and the economy in general are collective illusions to begin with and all that, but do we really need to be reminded quite so forcefully?

Might be time to invest my money in something a little more solid, like canned food and ammunition.

Re:SELL! (1, Insightful)

NevarMore (248971) | more than 4 years ago | (#32117710)

If daily market fluctuations are affecting your long-term retirement savings its time to just dig your own grave and have a nap.

Re:SELL! (5, Insightful)

Skyshadow (508) | more than 4 years ago | (#32117806)

Yes, why should anyone be concerned that their ability to afford food and heat in their declining years is dependent on the long-term stability of a system that can be radically damaged by a single mistyped letter?

I guess we're all just lucky this guy hit "b" and not "z".

Re:SELL! (1, Insightful)

Cheile (724052) | more than 4 years ago | (#32117898)

Yeah, so "radically damaged" that in a matter of minutes the market had recovered and many trades that would have the potential of affecting longer term outcomes are being reviewed by the exchanges to see if they qualify as "Clearly Erroneous" so they can be busted.

GP is right. If your long term financial outlook can be unhinged by intra-day market moves you've got something seriously wrong with your long term financial plan.

Re:SELL! (4, Insightful)

NevarMore (248971) | more than 4 years ago | (#32117954)

It's not radically damaged. It slumped for a day.

I own P&G stock, bought it and its grown in value over the last 15 years. Thats through the dot-bomb, through at least one major recesssion, etc. etc. Today's hit might affect my dividends next quarter, but it'll hardly affect my ability to use that stock when I retire in 40 years.

Re:SELL! (0)

Anonymous Coward | more than 4 years ago | (#32117982)

You should be just as concerned by the long-term stability of a system dependent on the printing of money and raiding from various trust funds.

Re:SELL! (3, Insightful)

WrongSizeGlass (838941) | more than 4 years ago | (#32117990)

If daily market fluctuations are affecting your long-term retirement savings its time to just dig your own grave and have a nap.

To be fair, a 1,000 point swing isn't exactly something that is considered a 'daily market fluctuation'. Granted, a 1,000 point loss over a week or two is still very possible, but you have a chance to sell your long positions during that period of time. When it happens while you're eating lunch or waiting for a bus then you're kind of screwed.

BTW, doesn't the market have some rules preventing a large percentage drop in a short time period?

Re:SELL! (2, Interesting)

maxume (22995) | more than 4 years ago | (#32118104)

The NYSE has rules in place to slow down price moves.

The electronic markets do not (or they are sufficiently different that they didn't kick in).

Re:SELL! (5, Informative)

Anonymous Coward | more than 4 years ago | (#32118108)

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

The first circuit breaker gets tripped at -10%. Today's fall wasn't quite -10%

Re:SELL! (4, Insightful)

sribe (304414) | more than 4 years ago | (#32117772)

Some people see disaster, some see a good buying opportunity ;-)

Re:SELL! (4, Funny)

WrongSizeGlass (838941) | more than 4 years ago | (#32117886)

Some people see disaster, some see a good buying opportunity ;-)

I believe you're referring to a Crisitunity [urbandictionary.com] .

Re:SELL! (1)

tc3driver (669596) | more than 4 years ago | (#32117784)

Well, I think it is high time we re-usher in the times of "Are you sure you want to do that?"

Re:SELL! (4, Funny)

hoggoth (414195) | more than 4 years ago | (#32118254)

Clippy: "Hi, I noticed you were trying to buy one billion shares of Proctor and Gamble even though there are less than a billion in existence. Would you like me to make that a shortcut for you?"

Re:SELL! (1)

chaboud (231590) | more than 4 years ago | (#32118284)

So, like Bill-Clippy? A Bull pop-up? These things happen. That the rest of the market could go all panicked before knowing the origins of the futures sale and flip out is purely the problem of the idiots who knee-jerk sold off.

This kind of lesson is long overdue. Everybody playing high-frequency trading like this deserves to get burned now and then.

Re:SELL! (5, Funny)

Sponge Bath (413667) | more than 4 years ago | (#32117810)

...something a little more solid, like canned food and ammunition.

You might be happier with a Whisky and Prostitutes ETF. Consult your broker today.

Fat fingers + ammo? (5, Funny)

syousef (465911) | more than 4 years ago | (#32117890)

Might be time to invest my money in something a little more solid, like canned food and ammunition.

Yes, because fat fingers and ammunition go together well...as long as you don't invest in a gun too.

Re:SELL! (1)

fuzzyfuzzyfungus (1223518) | more than 4 years ago | (#32117900)

Well, at least the carpets on Wall Street are generally more tasteful than the carpets in Vegas....

Re:SELL! (1)

maxume (22995) | more than 4 years ago | (#32117904)

Well, it didn't drop 1000 points in one afternoon. It dropped 600 in about 10 minutes, and then decided it didn't like that, so went back up more than 500 points, dropping less than 400 for the day.

Re:SELL! (5, Interesting)

tgatliff (311583) | more than 4 years ago | (#32117906)

It doesnt take a genius to figure out that the "typo" theory is BS... In 2008, it was a "computer fault"... Deflation is still very much in control at the moment, and it appears that we have only delayed it. As greece and many other sovereigns start to default on their debts, we will see the leg down... Acceptance is a b&^%*& sometimes...

Re:SELL! (4, Interesting)

name*censored* (884880) | more than 4 years ago | (#32117912)

It reminds me a little of a throwaway comment Stephen Hawking made in the recent series Into The Universe With Stephen Hawking [wikipedia.org] - he was asked not to speculate on the end of the universe in a certain lecture series for fear that it would affect the stock market. Really? Even if the universe was going to end in our lifetime, and no-one had noticed before now (oops), what kind of fool would hear the news and immediately worry about his or her stock portfolio? What are you going to do with your money after the universe ends? You would think (if people behaved rationally) that the stock market would grind to a halt when every trader says "Screw this, I haven't got much time left and I'm not going to waste it here".

Re:SELL! (1)

maxume (22995) | more than 4 years ago | (#32117964)

Well, if the world was going to end in 3 years, I'd try to take that money and do something with it damn fast (operating with the notion that people are going to stop paying attention to money fairly soon, the 'something' would be directed towards making those years as fun as possible).

Re:SELL! (5, Funny)

Stele (9443) | more than 4 years ago | (#32117968)

I can't be sure what happened to Procter and Gamble, but I just made a killing on pork bellies and orange juice!

Re:SELL! (4, Funny)

Scaba (183684) | more than 4 years ago | (#32118192)

I can't be sure what happened to Procter and Gamble, but I just made a killing on pork bellies and orange juice!

Louis: Looking good, Billy Ray!
Billy Ray: Feeling good, Louis!

Re:SELL! (2, Insightful)

Red Flayer (890720) | more than 4 years ago | (#32117970)

Frankly, I was more comfortable with the concept that the DOW could drop 1000 points in one afternoon due to some obscure overseas debt concerns than I am the idea that the DOW can drop 1000 points in one afternoon because of a fucking typo.

Well, the fat finger may have triggered the sell-off, but it probably would have happened anyway, albeit in a more controlled manner. Everyone's a little antsy with the Greece situation right now, and the market was eventually going to reflect the increased instability there.

Might be time to invest my money in something a little more solid, like canned food and ammunition.

Might I suggest sandwiches? As one expert so presciently said:

"Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor.

Actually (5, Insightful)

copponex (13876) | more than 4 years ago | (#32117986)

When you can make money hand over fist doing nothing, a very bad thing has happened: work has ceased to become a rewarded function. Instead, it's who you can screw over with dodgy investment strategies and exotic financial instruments that are not only worthless, but a liability. It's time that we end the casino markets and return to investing in things that are actually part of the economy that creates jobs - manufacturing, infrastructure, and technology.

Fund managers who literally do nothing but piss away money are making $1,000 an hour, and the people who educate our children are making less than $20 an hour. Something is seriously wrong with this picture.

Re:Actually (0)

Anonymous Coward | more than 4 years ago | (#32118086)

So way we all

Re:Actually (5, Insightful)

grolaw (670747) | more than 4 years ago | (#32118272)

That nails it. The synthetic instruments in trade now exceed the GNP of the entire planet. Smoke and mirrors - vast investments in products that have no intrinsic value - we are playing dice with the planet's economy.

sell low, buy high? (1)

FooAtWFU (699187) | more than 4 years ago | (#32118052)

So you're basically saying "sell low, buy high?" I love you, man. I'll be sure to thank you for the killer deals I get on my retirement portfolio next week.

Re:SELL! (0)

Anonymous Coward | more than 4 years ago | (#32118188)

Damn, this guy created a new depression! His mistake threw the worldwide markets in a down spiral that is going to end with the frigging destruction of the capitalist system.
Asia markets are already pointing to 25 to 30 % down for this Friday and with the crisis in the Eurozone, the world now is going to frigging end for sure, and all because of a typo, and qwerty keyboards...

Re:SELL! (1)

noidentity (188756) | more than 4 years ago | (#32118252)

The problem isn't that a single (supposed) error can occur, it's that it can cause this. It's like blaming a storm on a butterfly, rather than seeing it more accurately: it's a chaotic system which is somewhat random, based on insignificant values changing.

seems.... (1)

ihxo (16767) | more than 4 years ago | (#32117744)

Seems the market's still dropping in after market trading....

Tomorrow's going to be a wild ride.

Safeguards? (0)

Anonymous Coward | more than 4 years ago | (#32117748)

They make money when this happens. It's like a blessing in disguise.

Re:Safeguards? (3, Insightful)

v1 (525388) | more than 4 years ago | (#32118050)

I'd love to have had my eye on the boards at that time, there was major money to be made in those brief minutes between when the B was bought and when it was immediately resold. This is not so much a problem of insanity on the stock exchange floor, as it is the automated stock trading programs running continually looking to take small advantages on micro market fluctuations. This one just tripped a few too many of them all at once, causing something of a domino effect. I'd expect 80%+ of the "very high volume" of that time period was done entirely by automated trade programs.

Then one has to ask, was the mistake in the fat finger that hit "B" instead of "M", the (popular option) "are you sure you want to do that?", OR can we look at the trading apps that haven't been told to do a sanity check when they see a very unusual trade occur. IMHO this entire fiasco is a collection of bugs (ok we'll call them "oversights") in the auto trade programs on wallstreet. The people on the floor were just looking at the board with their jaws dropped open trying to figure out what was going on -- what the programs SHOULD have been doing. Should have been throwing up a flashy window on someone's screen saying HEY COME TAKE A LOOK AT THIS! Instead they just went wild selling and buying, thinking they were reacting to market conditions, not able to consider fat fingers.

ACN- Accenture (0)

Anonymous Coward | more than 4 years ago | (#32117752)

Accenture went down to 1 cent today as well. Did they fat finger that one too?

b n m (2, Insightful)

Dthief (1700318) | more than 4 years ago | (#32117760)

Thats a f*ing fat finger if it hit b instead of m! or maybe its not a qwerty

It has to be said.... (1)

Rayzed (786761) | more than 4 years ago | (#32117766)

That's one huge B-M problem...

Happens to the best of us (5, Funny)

Renderer of Evil (604742) | more than 4 years ago | (#32117770)

I can relate because one time I typed :q! instead of :w, losing about 5 minutes worth of typing. The typed text had sentimental value worth billions.

Re:Happens to the best of us (1)

h4rr4r (612664) | more than 4 years ago | (#32117812)

Which is why you should use Shift+z+z. Totally avoids that sort of confusion.

Re:Happens to the best of us (5, Funny)

Anonymous Coward | more than 4 years ago | (#32118036)

Which is why you should use C-x C-c. Totally avoids that sort of confusion.

FTFY.

Re:Happens to the best of us (1)

h4rr4r (612664) | more than 4 years ago | (#32118166)

That does not work in a real man's editor.

Re:Happens to the best of us (1)

Ethanol-fueled (1125189) | more than 4 years ago | (#32117896)

The typed text had sentimental value worth billions.

Dear Jennifer, I have something important to tell you. I qant you.

Sincerely,
Renderer of Evil

Heh, should've written it by hand. Chicks love that, especially if they receive it in the mail. It's a most pleasant surprise.

Slashdot, you missed the software part! (4, Interesting)

Wrexs0ul (515885) | more than 4 years ago | (#32117788)

CBC Story about software controls for selling on the market: http://www.cbc.ca/money/story/2010/05/06/tsx-markets.html [www.cbc.ca]

Nuts to fat finger keyboards, there are automated software controls in the industry that caught-on to the sale and snowballed this individual's mistake into something really big. The issue wasn't just in this guy's mistake, but the fact that potentially billions of dollars changed hands because of a trust relationship these systems have with market indicators.

Not that there's anything wrong with that: on a good day this could protect big firms from being the guy caught holding the bill, but I think we've discovered where the next upgrade in broker software might be :)

-Matt

Re:Slashdot, you missed the software part! (3, Insightful)

SpeedyDX (1014595) | more than 4 years ago | (#32117914)

I'm not sure exactly how you protect against that. The software is meant to detect a certain trigger and complete certain actions based on that trigger. It seems in principle impossible for the software to figure out the reasons behind the trigger occurring (how do you tell the difference between an aggressive speculative trade and a typo when they both result in the same thing? Namely, selling off $X amount of shares.). This is not just a problem with software, but you can imagine humans doing the same thing. They see a huge sell off of a certain stock and need to make a quick on-the-spot decision on whether to hold or sell. Maybe the seller figured out something was going on in the company. Maybe it was a typo. You can't know for sure.

So it seems less like a problem with the software, and more like just a side effect of a speculative trading model.

Re:Slashdot, you missed the software part! (2, Insightful)

greg1104 (461138) | more than 4 years ago | (#32118200)

When I used to write my own automated trading system software, I wrote some code that ignored bad events until they had persisted for a small period of time. That was motivated by a stop loss order I had in place automatically taking me out of a position at a severe loss when a bad tick (one second) of data from a mistaken trade showed up, the chart was quite similar to today's mess. So it's easy to write something that rejects bad market data for a little bit, waiting for some confirmation before doing something rash. For what I traded, if I saw the same condition for five seconds straight, it was probably real and then I'd have the program act.

Unfortunately, the current situation market includes so many automated systems that try to make money based on high frequency trading [nytimes.com] that the normal safeguards here are rejected as "adds too much latency". It's yet another one of those situation where optimizing for the normal case, where fast trades are better, causes instability during unexpected situations.

Re:Slashdot, you missed the software part! (0)

Anonymous Coward | more than 4 years ago | (#32118240)

They see a huge sell off of a certain stock and need to make a quick on-the-spot decision on whether to hold or sell.

I don't think this is the root problem with the stock market, but it's pretty darn close to it. People making "quick on-the-spot decisions" conflicts with the concept of the stock market as an investment.

Re:Slashdot, you missed the software part! (3, Funny)

wykell (1323665) | more than 4 years ago | (#32118148)

Its not going to be an upgrade in broker software, but in broker hardware. And by that, I mean they are going to remove the fingers of the brokers.

Protections may be bypassed... (4, Interesting)

tlhIngan (30335) | more than 4 years ago | (#32117794)

So you implement some protection. Then some prima donna trader comes by and asks that they be disabled and his trades unquestioned. If the company makes good profit off the guy, down the protection goes.

Reminds me of this story on a commodities trader that not only didn't close his position, but actually ended up taking physical delivery of the commodity. Oops. Sure there were protections, but the guy had them disabled.

http://thedailywtf.com/articles/special-delivery.aspx [thedailywtf.com]

Hell, for all we know, this is exactly what happened - most traders can't enter in a "b", except a succint few well-trusted individuals. Just one of the "gods" managed to fumble it.

Re:Protections may be bypassed... (2, Interesting)

Xugumad (39311) | more than 4 years ago | (#32118092)

Trust me, the Daily WTF story didn't happen (if you want to, you could read about coal futures until you believe me, but I'd recommend just trusting me on this). However, I know personal trading platforms all come with "Yes, I know what I'm doing, really really really let me shoot myself in the foot" options, I can easily accept that institutional systems have the same for some traders, and even more likely have bugs in the protections...

I can't see any other reason for the sell off ... (1, Interesting)

Anonymous Coward | more than 4 years ago | (#32117814)

I mean with a quarter of Europe circling the drain and the whole country of Iceland looking for a buyer that will assume their debt. Add in the south eastern US coast may be facing a depression since they depend on tourism and the ocean for 90% of their income. Do I even have to bring up the rest of the country? They were lucky some one didn't post a "Buy" notice on canned food and shotguns.

Do niggers use the stock market? (-1, Troll)

Anonymous Coward | more than 4 years ago | (#32117830)

I'm curious..

Institutional Traders Don't Enter Trades Like That (5, Interesting)

Knara (9377) | more than 4 years ago | (#32117838)

It may have been a system problem, that's quite possible. But institutional traders don't type in "b" or "m" next to some number they type in of stock they want.

But even in some strange world where they did, entering in a standard lot quantity that required an "m" (much less a "b") for the stock that is suspected to be the issue at hand (PG), would result in an order that exceeded the 30-day avg vol for PG by a factor of 10.

And that's not even considering that the firm's risk management would, in theory, have caught the issue already.

I am, obviously, doubtful of this explanation.

Re:Institutional Traders Don't Enter Trades Like T (1)

gbjbaanb (229885) | more than 4 years ago | (#32117978)

yes, I remember another newsworthy trading mistake where the trader bought 1000 times more stock than he wanted. I think the trading keyboards have ",000" keys on them so the poor dears don't have to press 0 three times.

Of course today, 1 guy cocks it up, and then all the automated systems pick up on the trade and start selling off which quickly snowballs. This is why the stock market is so eager to drop. when they've figured it out expect the prices to rise back as suddenly. It makes it difficult for the small investor, but too bad - the big boys don't really give a damn about you.

Re:Institutional Traders Don't Enter Trades Like T (0)

Anonymous Coward | more than 4 years ago | (#32118016)

So what if a trader types in T for thousands instead of K? Does he sell 1 trillion?

clueless idiots, everyone is just parroting the "financial" media line. amazing how CNBS knew about this bad trade a few minutes after the market popped back up 600 points. if anyone really believes this, they should be euthanized.

Re:Institutional Traders Don't Enter Trades Like T (1)

tys90 (1123511) | more than 4 years ago | (#32118026)

Okay, I have no knowledge of the everyday aspect of trading besides the small personal investing I do but why are they typing orders with words? Next thing we know, the DOW will be down 5000 and it will be attributed to someone accidentally typing "T" instead of "M" at the same time bumping the adjacent "r" because he can't use a keyboard with his friggin bear paws of hands.

Re:Institutional Traders Don't Enter Trades Like T (1)

Knara (9377) | more than 4 years ago | (#32118168)

Well, I(nor does anyone right now, really) have no idea of the details of the trading platform being used (if, indeed, its even relevant). However, I've never seen (nor heard of, nor have the folks who I've talked to who have worked with institutional investing) a system where you type in the amount of stock you want and then put a letter after it.

Re:Institutional Traders Don't Enter Trades Like T (1)

Xugumad (39311) | more than 4 years ago | (#32118032)

I wouldn't want to absolutely state some institution doesn't have a system that takes in 'b' or 'm' after quantity... but I'll admit, I can't see it either. They were talking about the stock future, not the stock itself, though; that's slightly more credible.

My bet would be someone made a much more complex screw up and this is just the story people are hearing instead.

Re:Institutional Traders Don't Enter Trades Like T (0)

Anonymous Coward | more than 4 years ago | (#32118098)

I agree. It smells like a narrative cooked up to soothe investor fears and prevent a broader sell-off.

Re:Institutional Traders Don't Enter Trades Like T (1)

Knara (9377) | more than 4 years ago | (#32118180)

I agree. It smells like a narrative cooked up to soothe investor fears and prevent a broader sell-off.

Eh, I don't think its a conspiracy based on some sort of "hidden true valuation" of the market as a whole. I think it was a system error, just not a typo (the situation is very similar to Black Monday, after all).

Re:Institutional Traders Don't Enter Trades Like T (4, Insightful)

atomic777 (860023) | more than 4 years ago | (#32118142)

It amazes me that the financial industry continually gets a free pass on matters that would result in public outrage towards any other industry that deals with people's livelihoods.

This explanation, whether true or not, is equivalent to saying that an airplane crashed because of a single faulty sensor.

Or a bridge fell due to one rusted bolt.

But, here, one fat finger led to the temporary destruction of nearly 1 trillion dollars of value! Would we tolerate such bogus explanations from aerospace engineers or architects? Why can we not demand the same from our financial "engineers"?

Re:Institutional Traders Don't Enter Trades Like T (1)

jonpublic (676412) | more than 4 years ago | (#32118146)

Hedgefund shorting the PG engineered something. That's my guess.

Yep, it's BS (0)

Anonymous Coward | more than 4 years ago | (#32118156)

The rumor that a fat finger caused this is a joke. It looks more like someone knew what they were doing and lead the regular HFT gang right into a trap. The big question is if they will keep doing it, we could be in for a very wild ride.

look at the volume! (3, Interesting)

je ne sais quoi (987177) | more than 4 years ago | (#32118172)

Your comment is spot on. Look at the volume of shares traded for PG today [google.com] . There is no statistically significant spike in volume today that correlates with the price drop. If the sell was staggered, the price drop should have been staggered. Since it isn't, either Google's volume is way off or this story is a crock. Based on the volume data, the sell-off started well before the major drop in stock price.

I suspect that something funny did happen though, in TFA they are quoting that PG was trading down at $30 per share at some point, so something definitely slipped. Fortunately, we managed to avoid another Black Monday [wikipedia.org] , where the DOW went down and stayed down.

Re:look at the volume! (1)

Knara (9377) | more than 4 years ago | (#32118220)

My current (non-expert) opinion is that this *was* like Black Monday, but the systems instead of freaking out, triggered all their stop-losses and then when the market was 1000 down (or whatever percentage for the equities they were monitoring) automatically started buying again (deals of a lifetime!). So instead of having to restrict trade the day after Black Monday (since the floor to that event happened on Tuesday), we saw in intraday, instead.

My $.02, anyway.

Re:Institutional Traders Don't Enter Trades Like T (1)

bezenek (958723) | more than 4 years ago | (#32118270)

Maybe this was a cyber-terror attack and it is being covered up.

-Todd

Market correction due and it's here! (4, Interesting)

tekrat (242117) | more than 4 years ago | (#32117846)

They've been saying for some time the market was due for a correction. Mind you, at the height of the financial meltdown, the Dow was at 6500, and has almost doubled value in about a year, it was rising too fast considering that the recovery still really hasn't come (i.e., there are still no jobs).

The only people making money are the same ones that are always making money -- the fat cats. Now it looks like the market will correct, and probably stablize around 10k, maybe 9. And even more people will lose their jobs and the cycle will continue until America admits that it is bankrupt.

Then will come some really hard times, but, once we address the real issues plauging the country, we'll come out of it stronger. But first, we need to start getting rid of all the lawyers....

Re:Market correction due and it's here! (0)

Anonymous Coward | more than 4 years ago | (#32118212)

I think you're not getting it. The US unemployment levels will never be as low as they were before.
You need to adapt to the new reality.

Take This Finger For Your Stupid Story (0)

Anonymous Coward | more than 4 years ago | (#32117864)

Please reference the standard practice of entering numbers in trading systems with letters INSTEAD of digits.

Slashdot: News FROM Idiots Because It DOESN'T matter.

Morons.

Yours In Odessa,
Kilgore Trout

How fat can it be? (1)

loudheart (1787330) | more than 4 years ago | (#32117878)

Between the key 'B' and 'M' is the key 'N' on the keyboard. The distance between 'B' and 'M' is about 1.5 inch apart.

I'm surprised, somewhat. (3, Interesting)

fuzzyfuzzyfungus (1223518) | more than 4 years ago | (#32117884)

Not that there isn't some finance-clippy that pops up and asks "You appear to be tanking the Dow, would you like help with that?", or that people are allowed to do whatever stupid shit they want with the assets they have(the amount of stupid shit that people are allowed to do with assets that they don't have is somewhat concerning, however).

However, I am somewhat surprised that the guys who do UI design for financial systems don't design systems to make things like power-of-ten or million/billion errors very difficult. Having a 3 factors of 10 difference be just one key away(and phonetically not all that dissimilar) seems like a mess waiting to happen.

I've seen in doctor's offices(and I know pharmacists and pharmacy techs, especially ones where compounding and other tougher than "dispense stock pill" type activities go on get drilled hard on this) outlining acceptable and unacceptable notetaking protocols to reduce the risk of power-of-ten dosing errors(things like ".2 is wrong, there should always be a leading zero to clue you in to the decimal point, use 0.2.") Some of them are even domain specific conventions, specifically trading off other factors in favor of reducing the risk of error. In science, for instance, saying 2.0, or even 2.0000 if you have that much precision, instead of 2 is a good thing. It tells your reader how precise the value they are looking at is. In prescriptions and medical notes, "2.0" is dangerously close to "20", and is thus avoided.

One would think that, even if it meant making up arbitrary symbols, or using UI element sizes to convey magnitudes, or something, financial UIs would adopt a similar set of domain-specific tricks to head off the most common and dangerous errors.

Re:I'm surprised, somewhat. (1)

Knara (9377) | more than 4 years ago | (#32117948)

Many of the things you typed are correct and *are* in place. Which is why this explanation we're hearing right now is, to me, suspect.

dont be so damn naive (0)

Anonymous Coward | more than 4 years ago | (#32117892)

anyone who believes this bullshit excuse is retarded.

That's what they get for running Linux (5, Funny)

Locke2005 (849178) | more than 4 years ago | (#32117894)

If they were running Vista, they would have to click through "Are you sure you want to do this?" and "Are you really sure you want to do this?" popups, as well as a popup of Clippy asking "It looks like you are trying to trigger a stock market panic. How can I help?" No fat-finger problems there!

It's been a few years.... (1)

coolgeek (140561) | more than 4 years ago | (#32117918)

But when I worked on Wall Street in the late 80's, you had to enter zeroes to make a trade. None of this B or M bullshit. It's just a few extra keystrokes, but the trader's intent is always clear, they pretty fucking well know the difference between 6 and 9 zeroes.

Re:It's been a few years.... (0)

Anonymous Coward | more than 4 years ago | (#32118058)

Yeah. The "b" vs "m" story doesn't hold water for me, even aside from the other issues (that I elaborated on up-thread).

Just a game of Hot Potato? (1)

AaronLS (1804210) | more than 4 years ago | (#32117934)

I have kind of an off topic question. How is a stock's value tied to a company's performance? If a stock's value is based purely on the demand for the stock and what other's bid for it, what incentive do they have to buy the stock? It's almost like I am buying a turd under the pretense that someone else will be stupid enough to come along and buy that turd for more money. All the explanations of stock price I see seem to have no relation to the value of the company, except in those cases where the company pays a dividend. So for non-dividend paying stocks why would there be a demand for the stock? Why do people want to own the stock other than to hope someone else will want it more?

Re:Just a game of Hot Potato? (0)

Anonymous Coward | more than 4 years ago | (#32117958)

It's almost like I am buying a turd under the pretense that someone else will be stupid enough to come along and buy that turd for more money.

And the student became enlightened...

Re:Just a game of Hot Potato? (1)

DCstewieG (824956) | more than 4 years ago | (#32118074)

Welcome to the modern stock market. I learned this the hard way with some Apple stock recently. During the downturn did Apple's profit fall? Nope, just kept rising. So what did the stock do? Lost over half its value just because everything else did. Fortunately for me it recovered for me to break even by the time I had to sell it but if you had looked at it logically (a dangerous thing to do with the market) I should have made out.

It's a casino (1)

copponex (13876) | more than 4 years ago | (#32118154)

The DOW and stock prices in general have no relation to the economy, or to the health of the company. It's just a number. A number that can make people with a lot of money in paper feel very good, or very bad.

Other nations like England have small taxes that slow down trading, because you have to pay a "token tax" every time you make a trade. It doesn't seem to make much of a difference, but I think it's a good idea. A better idea would be forcing traders to hold their investments for even one month - all of this market volatility nonsense would disappear. Or even just to force holding a short sale for a week. It's a different moment when you're about to dump five hundred thousand in a particular company, when you know you can't decide to sell it in the next moment. It may make it harder for large companies to raise capital, but they don't appear to do anything useful with it anyways.

Re:Just a game of Hot Potato? (1)

jayme0227 (1558821) | more than 4 years ago | (#32118174)

It's almost like I am buying a turd under the pretense that someone else will be stupid enough to come along and buy that turd for more money.

This would make you a day trader.

Institutional investors, on the other hand, value stocks based on past performance and future expectations. For stocks with no dividends, they tend to evaluate the company as a whole and its projected growth and determine that value, then drill it down to what they think they should pay for ownership on a per share basis. As the company grows and increases profits, it becomes more valuable even if it isn't yet paying a dividend.

Generally stocks that don't pay dividends are expected to re-invest that money back into the company in order to grow. The thought is that the investment back into the company is worth more in future dividends and stock value than the current dividends would be worth. Investors want to buy in now so that they can be there when the company reaches a point where its rate of growth slows and it does decide to pay the dividend.

Now, this is the way that a sane market should work, there are a whole lot of other things that affect share prices that are less rational.

Re:Just a game of Hot Potato? (1)

pclminion (145572) | more than 4 years ago | (#32118250)

It's almost like I am buying a turd under the pretense that someone else will be stupid enough to come along and buy that turd for more money.

Congratulations, you figured it out.

Well, it's not QUITE as simple as that. Sometimes the stupid "someone else" is a company which wants to acquire a smaller fish. Typically, the stock will be bought out for a nice premium, or converted to parent shares at a desirable rate.

Yes, you really are just gambling that one of those two things will happen.

Now, if you hold a LOT of shares, you hold voting power over the board of directors and certain other corporate decisions. This only really comes into play for big holders though.

Re:Just a game of Hot Potato? (1)

ObsessiveMathsFreak (773371) | more than 4 years ago | (#32118264)

How is a stock's value tied to a company's performance?

What would companies have to do with stock trading?

This should happen EVERY DAY, would be good (4, Interesting)

lanner (107308) | more than 4 years ago | (#32117940)

You read that headline right. This should happen ALL THE TIME. It would be good for the markets.

Speculators would be driven out, or driven insane. Emotionally driven traders would have heart attacks.

Sound judgments made based on factual data would not be affected.

Next week, people like me won't give a toot that this ever happened. However, a lot of day traders just pooped their pants. I'm buying men's underwear stocks.

The person who made the mistake will be punished dearly.

Re:This should happen EVERY DAY, would be good (3, Funny)

dAzED1 (33635) | more than 4 years ago | (#32118182)

Speculators would be driven out...a lot of day traders just pooped their pants. I'm buying men's underwear stocks.

So, you're admitting you're a speculator?

So soon on /.? (5, Funny)

Anonymous Coward | more than 4 years ago | (#32117944)

Shouldn't this hot topic be debated on /. in, say, a week?

Re:So soon on /.? (1)

ArcadeNut (85398) | more than 4 years ago | (#32118064)

Don't worry, it will be. And probably a couple more times after that!

Smoke Screen (1)

GPLDAN (732269) | more than 4 years ago | (#32117956)

It's a bit of a smoke screen story. I doubt it is even true. It's to cover up the real issue of automated trading. Denninger covers this in his Ticker for today:
http://market-ticker.denninger.net/archives/2282-Mr.-President-Unplug-the-Fing-Computers.html [denninger.net]

I'm no fan of Yamhead, his Perma-Bear status is a problem, but he does call out the systemic problems and the systemic FRAUD in the market correctly.

Re:Smoke Screen (1)

gatkinso (15975) | more than 4 years ago | (#32117998)

Program trading was a big issue back int he 80's, but "supposedly" there are now safeguards against an automated sell off.

Or so they say.

He, was from Europe/ non UK ! (3, Informative)

burni2 (1643061) | more than 4 years ago | (#32117976)

because in central EU(let me speak for Germany) - 10^6 is a "Million" you would say million (we all agree) - 10^9 is a "Milliarde" you would say billion - 10^12 is a "Billion" you would say trillion We also have a trillion but if our state debt would be measured in trillions of euros, we all would have "fun" like in the 1930s. Ok this is totally missing logic, he just had fat fingers.

NYSE Spokesman Disagrees (5, Informative)

Chad Birch (1222564) | more than 4 years ago | (#32118000)

Re:NYSE Spokesman Disagrees (2, Interesting)

maxume (22995) | more than 4 years ago | (#32118244)

He is defending the NYSE. The bad trades happened on other markets. He is not disagreeing with the article.

"I must've put a decimal point in the wrong place (2, Funny)

ryan.onsrc (1321531) | more than 4 years ago | (#32118004)

.... or something. Shit, I always do that.

I always mess up some mundane detail."

I saw the plunge protection team stepped in (1)

scorp1us (235526) | more than 4 years ago | (#32118042)

I make the unjustified claim PPT [wikipedia.org] has stepped in and saved the market once again. Seems exactly what they were suited for.

Re:I saw the plunge protection team stepped in (1)

Knara (9377) | more than 4 years ago | (#32118102)

I haven't heard the PPT thing since 2008, I missed references to them so much.

The likely real explanation (that everyone's buy orders kicked in when their systems saw stupidly good deals) is so much more boring.

not a very credible version (0)

Anonymous Coward | more than 4 years ago | (#32118046)

just a rumor and not a very credible one.. eurjpy dropped some 4% 5 minutes before the big fall -- the rest was correlation algos and stop losses imho

I demand that whoever went long at spx 1050 today pays for the next bailout...

oh noes, more socialism (0, Flamebait)

Airdorn (1094879) | more than 4 years ago | (#32118068)

Oh boy.. yet another reason the current admin. will be pushing for more gov't controls, I bet. Time to get out the popcorn and sit back and watch.

I think you guys are missing the actual point (5, Interesting)

Anonymous Coward | more than 4 years ago | (#32118140)

What's being talked about here isn't the general decline in the market today, but a very suspicious "blip" that occurred in a huge number of stock prices at 2:45 EST, followed by immediate recovery.

Look at the blip:

Adobe [google.com]
Google [google.com]
Westlake Chemical [google.com]
Cabela's Incorporated [google.com]
Apple [google.com]
Microsoft [google.com]
Titanium Metals [google.com]
Fidelity IIS [google.com]

This shit is across the board, with very few exceptions. You try explaining how something like that happens apart from some major fuckup somewhere.

See?! (4, Funny)

GrumblyStuff (870046) | more than 4 years ago | (#32118152)

Obesity is destroying America!

The guy may have got a bonus! (0)

Anonymous Coward | more than 4 years ago | (#32118228)

Just think... they sold high and then when everything else triggered a selloff, they could go back and correct the "mistake" and buy the 999M back at reduced prices.

The market runs on lemming stupidity (2, Interesting)

erroneus (253617) | more than 4 years ago | (#32118246)

We all know this and have known this for decades. The people who operate within the market like to think of themselves as sensitive to trends and currents and activities, but the reality is further from the truth -- a bunch of people doing what everyone else is doing hoping that the person in front of them knows where they are going.

The cure for much of this (not all of it) is setting up rules that limit the number of times a single item can be bought or sold in a day. Whatever the real "best solution" is (and I'm sure my notion isn't even close) it should probably focus on getting rid of the lemming factor that tends to send people marching off the edge of a cliff taking the whole market with them.

Dvorak -- B next to M (5, Funny)

by (1706743) (1706744) | more than 4 years ago | (#32118292)

On the Dvorak keyboard [wikipedia.org] , B is right next to M. That said, I use Dvorak, and have never personally caused a stock market fiasco. Maybe I should change professions...
Load More Comments
Slashdot Login

Need an Account?

Forgot your password?