On Thursday, the stock market took a bit of a roller coaster ride, and apparently a major cause may have been someone’s inability to type.
Reports are that some hapless trader made an error when typing in a futures order, accidentally typing B for billion instead of M for million. Oops.
So, apparently, this plus some additional system glitches caused some freakishly bad pricing in a matter of minutes. How bad? Well here’s some examples:
- Accenture – at 2:45pm it was at $40.13, then abruptly dropped to $0.01.
- Boston Brewing Company, maker of Sam Adams – also dropped to $0.01
- Sotheby’s – They went the opposite direction and for a few minutes was valued at over $100,000 per share
Yet, the NYSE and NASDAQ say there was nothing wrong with the trading computers. I call BS.
Look, I understand that a really bad mistake could do some damage. But is there really no “Are you sure you want to do this?” prompt when a guy enters an order for billions of shares? They explain that the reason that some of these shares dropped so precipitously (296 stocks had more than a 60% change in price during the 15 bizarre minutes) is that a glitch in the system caused a pause, and that for a very brief time, there were millions of shares to be sold, with no one to buy. When the buys could not be made, the systems sent all the trades to the electronic exchanges, which subsequently priced the “unsellable” shares to $0.01. Technically, they were priced at $0, but the system automatically adds a penny so the exchange can make some money.
Meanwhile, a large number of traders are having to buy new underwear.
So, it had nothing to do with the economy, nothing to do with Greece. It had to do with a guy who can’t type, and a very odd software structure.