![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
sub_dividedDid you know that the DOW dropped 1,000 points yesterday?
Wall Street Journal comments from Thursday
Wall Street Journal comments from today
Crazy.
From the articles and comments, this was either caused by fears over Greece defaulting on debt, or by a trader at Citibank typing "b" instead of "m", or by insiders taking advantage of automated processes to manipulate the markets, or by Obama's health care bill and the US National Debt (what?).
My limited, second-hand experience with computer trading is that a lot of algorhythms are actually very simple, brute-force things designed to e.g. sell a certain number of stocks wherever they'll get the best price. Maybe there was no "don't sell if the price falls below x" safeguard built in.
Selected comments:
And, finally:
Actually I was planning to head over to Macy's after work, since there's a 60% Off Mother's Day Sale going on right now.
Wall Street Journal comments from Thursday
Wall Street Journal comments from today
Crazy.
From the articles and comments, this was either caused by fears over Greece defaulting on debt, or by a trader at Citibank typing "b" instead of "m", or by insiders taking advantage of automated processes to manipulate the markets, or by Obama's health care bill and the US National Debt (what?).
My limited, second-hand experience with computer trading is that a lot of algorhythms are actually very simple, brute-force things designed to e.g. sell a certain number of stocks wherever they'll get the best price. Maybe there was no "don't sell if the price falls below x" safeguard built in.
Selected comments:
Hey, when buyers pull their bids, what type of action do you expect? Stocks have to drop to a level where bids re-appear. As stocks drop, sell stop orders get triggered as market orders. If there is no match, down you go. There appears to have been a glitch with a P&G trade where the stock traded down 20+points and then shot back up to $61. Since this is a Dow stock, that type of move impacted the average.What sort of "glitch"? I'll be what happened is that the trade wasn't on the NYSE, they have specialists to prevent that. Someone presented a market order and the only bid was a some lowball limit order.
You're right. The NYSE reported that P&G did not trade below $56. That trade at lower prices was off the NYSE. Never waste a crisis.... looks like someone is playing dirty, wanting deals on the cheap. Time to have the SEC investigate this obvious manipulation of the market, but truly rules based trading is ultimately also at fault. I know I did not get my wings clipped since I am long term investor, but what about some of my mutual funds, they probably got schooled.
a trader accidentally placed an order to sell $16 billion, instead of $16 million, worth of e-minis, the futures contracts tied to equity indexes".
Just when some of the retail investors were about to decide it was safe to come out of hiding after all. I don't care if the market goes up 500pts tomorrow, these investors are not coming back. Not into this casino.
You know, if stocks weren’t so over valued, a drop in stock price would be considered to be a good thing. It would be called a sale, and people would buy up those stocks right and left just like after-Christmas sales. Imagine if all of a sudden gasoline were half price. How many people would be sitting around worrying about whether it was going to dip to one third price, and how many would be filling up their tanks as fast as they could? Unless a stock is cheap enough that you’re happy to own it due to its dividends, no matter what its future price may be, then its over priced. Just my two cents worth.
And, finally:
This is going to be another pump on the bicycle pedal towards a double dip recession. If you think people are going to ignore news like this and run out to Macy's you need your head examined.
Actually I was planning to head over to Macy's after work, since there's a 60% Off Mother's Day Sale going on right now.