Toronto Star, May 6th…
Mercifully, the latest stock market crash might have been caused by something with which many of us have personal experience: a “fat finger.”
SDA, via commentor ‘Melinda Romanoff’ at May 6, 2010 10:59 PM…
No trading platform allows the use of common english, in place of numerics, for electronic trading. None. And the CME has said nothing untoward occurred in the e-minis (electronically traded mini (1/5) S & P 500 stock futures contract).
The list of “corrections” from the NASDAQ has some unique overlapping data points: mutual funds and ETF’s holding the same individual stocks, as a multiplier).
This was no error, and I have made very expensive mistakes on the Globex trading platform. (In the pits too, but I won’t go into that.)
Cjunk, quoting Zero Hedge on May 7th…
A year ago, before anyone aside from a hundred or so people had ever heard the words High Frequency Trading, Flash orders, Predatory algorithms, Sigma X, Sonar, Market topology, Liquidity providers, Supplementary Liquidity Providers, and many variations on these, Zero Hedge embarked upon a path to warn and hopefully prevent a full-blown market meltdown.
WSJ, May 10th…
The trade by Universa, a hedge fund advised by Nassim Taleb, author of “Black Swan: The Impact of the Highly Improbable,” led traders on the other side of the transaction—including Barclays Capital, the brokerage arm of British bank Barclays PLC—to do their own selling to offset some of the risk, according to traders in Chicago.
Then, as the market fell, those declines are likely to have forced even more “hedging” sales, creating a tsunami of pressure that spread to nearly all parts of the market.
[…]
As more details of Thursday’s collapse become clear, there is less evidence to suggest a “fat finger” data-entry error caused the collapse. Instead, the picture is one of a rare confluence of events, some linked, some unrelated, that exposed weaknesses in the stock market large and small…