Star:“fat finger” moment - trader hit the "B" instad of the "M" key and P&G drops 33%
Cathal Kelly
Staff Reporter
For five minutes on Thursday, the world’s financial markets went haywire.
Several stocks were rendered momentarily valueless as traders struggled to absorb the blow. In only one instance, iShares Russell 1000 Value Index Fund – a $9.5 billion (U.S.) kitty – went from $59 to 8 cents per in an instant. This morning, it was back up over $59. Other stocks, like mammoth business consultancy Accenture, were rendered momentarily valueless – dipping to a penny per share.
“The sky is falling,” one financier told Reuters.
The Dow Jones Index dropped 1,000 points on Thursday – the worst daily loss in its history. Those ripples were felt across world markets. The TSX dipped 450 points – or nearly 4 per cent.
Before the panic had a chance to sink in, it was over. Markets ended the day badly pummeled, but finished well above record low levels.
So what happened?
The Wall Street Journal suggested it was a combination of jitteriness over unrest in Greece, gnawing worry over the European debt crisis in general and trader error.
Many are pointing to a suddenly infamous “fat finger” moment involving a single, unnamed trader. He/she apparently typed a “b” where an “m” belonged – dumping 15 billion shares of Proctor & Gamble and sparking a plunge. The stock dipped by a third, a shockwave that may have rippled through the rest of the market.
The Journal also noted that several “high-frequency” trading firms – the engines that keep the markets humming – stopped trading entirely for several key moments. That left a black hole in the market between the start of the panic – at 2:42 p.m. ET – and the beginning of the recovery – at 2:47.
During those five minutes, there simply weren’t enough buyers left in the system.
As a result, the Vix Index – Wall St.’s so called “fear gauge” of volatility – jumped to its highest levels since the bad old days of the sub-prime mortgage crisis.
The U.S. Securities and Exchange Commission has begun an investigation into what happened. The Journal hinted that that may include nixing “erroneous” trades. That means, anyone who sunk $1,000 into Accenture at a penny – and who’s now sitting on $4.1 million worth of the stock - probably shouldn’t be going on any spending sprees. LOL - but that takes the fun out of playing the markets
Cathal Kelly
Staff Reporter
For five minutes on Thursday, the world’s financial markets went haywire.
Several stocks were rendered momentarily valueless as traders struggled to absorb the blow. In only one instance, iShares Russell 1000 Value Index Fund – a $9.5 billion (U.S.) kitty – went from $59 to 8 cents per in an instant. This morning, it was back up over $59. Other stocks, like mammoth business consultancy Accenture, were rendered momentarily valueless – dipping to a penny per share.
“The sky is falling,” one financier told Reuters.
The Dow Jones Index dropped 1,000 points on Thursday – the worst daily loss in its history. Those ripples were felt across world markets. The TSX dipped 450 points – or nearly 4 per cent.
Before the panic had a chance to sink in, it was over. Markets ended the day badly pummeled, but finished well above record low levels.
So what happened?
The Wall Street Journal suggested it was a combination of jitteriness over unrest in Greece, gnawing worry over the European debt crisis in general and trader error.
Many are pointing to a suddenly infamous “fat finger” moment involving a single, unnamed trader. He/she apparently typed a “b” where an “m” belonged – dumping 15 billion shares of Proctor & Gamble and sparking a plunge. The stock dipped by a third, a shockwave that may have rippled through the rest of the market.
The Journal also noted that several “high-frequency” trading firms – the engines that keep the markets humming – stopped trading entirely for several key moments. That left a black hole in the market between the start of the panic – at 2:42 p.m. ET – and the beginning of the recovery – at 2:47.
During those five minutes, there simply weren’t enough buyers left in the system.
As a result, the Vix Index – Wall St.’s so called “fear gauge” of volatility – jumped to its highest levels since the bad old days of the sub-prime mortgage crisis.
The U.S. Securities and Exchange Commission has begun an investigation into what happened. The Journal hinted that that may include nixing “erroneous” trades. That means, anyone who sunk $1,000 into Accenture at a penny – and who’s now sitting on $4.1 million worth of the stock - probably shouldn’t be going on any spending sprees. LOL - but that takes the fun out of playing the markets
