Thursday, May 06, 2010

E-mini's Kill the Mo'

Equity indices' recent upward momentum stuttered this week because of Greece' financial troubles, then reversed definitively when the Dow plunged nearly 1,000 points a little over an hour before today's close. But not to worry.
A human trading error at a major firm was the root cause of Thursday's sudden, 9 percent selloff in U.S. stocks, sources told CNBC.

Multiple sources said a trader entered the letter "b"-as in "billion"-when he or she meant to type "m," for "million," shortly before 2:47 p.m. New York time.
The Wall Street Journal seems to confirm this incredible tale:
Several market watchers said they heard a major firm may have accidentally released an errant program, where 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.
That happens to me all the time. Once your fingers start twitching on those keyboard zeroes it's hard to stop. As the fellow who left the iPhone prototype in the bar might have said, oopsie.

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