Dow Jones Industrial Average Fell Almost 1000 Points

jacky · #1 7th May 2010, 06:15 AM

U.S. stocks tumbled the most in a year on concern Europe’s debt crisis will halt the global recovery. The sell-off briefly erased more than $1 trillion in market value as the Dow Jones Industrial Average fell almost 1000 points, a 9.2 percent plunge that was its biggest intraday percentage loss since 1987, before paring the drop.

Is it a good sign?

I don't think so....

.

Alchemist · #2 7th May 2010, 06:43 AM

This was the biggest ever intra-day fall for the Dow Jones Industrial Average.

According to latest reports, the fall was caused by some "typographical error".

Quote:

A computerized selloff possibly caused by a simple typographical error triggered one of the most turbulent days in Wall Street history Thursday and sent the Dow Jones industrials to a loss of almost 1,000 points, nearly a tenth of their value, in less than half an hour. It was the biggest drop ever during a trading day.

Source.

NASDAQ and NYSE have said that they will be cancelling some trades.

Quote:

Nasdaq issued a statement two hours after the market closed saying it was canceling trades that were executed between 2:40 p.m. and 3 p.m. that it called clearly erroneous. It did not, however, mention a cause of the plunge.

The NYSE also said it would cancel some trades on its electronic platform.

ashish_jain11 · #3 7th May 2010, 10:59 AM

Quote:

Originally Posted by Alchemist

NASDAQ and NYSE have said that they will be cancelling some trades.

Is it possible?

I mean how can they do this?

Suppose I have put an order to buy a script at 10% less than the current value and by error (somebody's machine) sold at that rate.

Can exchange reverse the trade?

vasa1 · #4 7th May 2010, 11:07 AM

Quote:

Originally Posted by ashish_jain11

Is it possible?
I mean how can they do this?
Suppose I have put an order to buy a script at 10% less than the current value and by error (somebody's machine) sold at that rate.
Can Exchange reverse the trade?

It is possible. I don't know how. I think it has been done in India as well.

Alchemist · #5 7th May 2010, 11:10 AM

Quote:

Originally Posted by ashish_jain11

Is it possible?

I mean how can they do this?

Suppose I have put an order to buy a script at 10% less than the current value and by error (somebody's machine) sold at that rate.

Can exchange reverse the trade?

I have no idea.

To me it seems unfair to one party, but then the exchanges have their own rules.

Atiker · #6 7th May 2010, 01:08 PM

Quote:

Originally Posted by ashish_jain11

Is it possible?

I mean how can they do this?

Suppose I have put an order to buy a script at 10% less than the current value and by error (somebody's machine) sold at that rate.

Can exchange reverse the trade?

And a little twist.

What if someone bought between 2:40 and 3:00 and sold later?

If the buy transaction is annulled how will the sell be honored?

Prudent_Investor · #7 7th May 2010, 01:55 PM

Trade Cancellations : Policy & Implementation.

Australian Stock Exchange

NYSE

Here's a news link :

Trade Cancellation

I am unable to understand this :

Quote:

Consulting firm Accenture (ACN), for instance, started the day at $41.94 a share, but a trade crossed for the stock at just 1 cent a share. That would effectively have wiped out $30 billion in market capitalization in a single trade.

Likewise, energy company Exelon Corp. (EXC) had a print cross at zero cents, wiping out nearly $29 billion in value.

In NSE/BSE if we place orders beyond a certain range, these gets rejected by the System, then how come these got executed ?

Alchemist · #8 7th May 2010, 02:08 PM

Quote:

Originally Posted by Prudent_Investor

In NSE/BSE if we place orders beyond a certain range, these gets rejected by the System, then how come these got executed ?

There are no such limits on the US exchanges.

On the NYSE, a stock may double or halve in a single day.