Dow Jones and error in a billion

New U.S. stock market losses were triggered one mistake a trader?

In brief: Dow Jones showed a record decline in U.S. history, perhaps accidentally.

Due to an error trader in one letter of the U.S. market within 15 minutes lost $ 1 trillion. It was the biggest collapse in the Dow Jones in history. Another “black Thursday” that occurred on May 6, likely will go down in history books. Within minutes the Dow Jones index fell by almost 1000 points and the S & P 500 lost just 8.6%.

Most proliferation version – the market sent into a tailspin a single trader for the random error. The entire catch is that everyone assumed that the collapse in the Dow Jones 998 points on Thursday afternoon reflected the spreading speed of the epidemic fears of a possible default of sovereign debt in Greece.

However, news concerning Greece and the passivity of the ECB, has already been won back the market to 14.42 local time in the U.S., when the index suddenly went into a nosedive. By 14.47 Dow Jones Industrial Average sank to a mark of 10 000 points, losing 998.5 points. Prior to that, the most significant drop in the day in the history of the index was on Sept. 29, 2008, when Dow Jones fell by 777.68 points.

As the recovery of the market closer to the bell at the closing of the rumors have become much more disturbing – a trader in the main dealing accidentally entered a team to sell futures at $ 16 billion instead of $ 16 million, as he wanted, plunging the market into chaos. That is simply confused the first letter in the words «billion» and «million».

At the same time, some analysts assume that market failure could be triggered by one of the major players. For example, firms that use computer programs to commit huge amounts of trades per second, too, could accelerate the overall decline.

However, now the most important question is whether yesterday’s move stock quotes an isolated incident or the start of the second credit crisis that could disrupt global economic recovery and put additional pressure on trading risky instruments.

In any case, the Commission on Securities and Exchange Commission with the Commodity Futures Trading of commodities have already said they would investigate “unusual trading activity”.

Pavel Migin
2010-05-09 11:04, Economics.

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One comment к “Dow Jones and error in a billion”

  1. 1000 points Says:

    1000 points

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