Share wars: how the robots are robbing you

Discussion in 'Trading' started by OddTrader, Aug 26, 2012.

  1. Share wars: how the robots are robbing you

    The prevalence of computer-generated trading in the modern sharemarket has created an unpredictable, and sometimes dangerous, environment for investors.



    ■In the Flash Crash, the US Dow Jones Industrial Average plunged 1000 points in 20 minutes, destabilising markets around the world. It quickly shoots back up.

    ■Shares of blue-chip QBE Insurance, a favourite of super funds, crash from $15.70 to less than 1¢ in about a minute. The trades are cancelled.

    ■More than 16.6million shares of FKP Property Group are traded at 40¢ each. The stock’s typical daily volume is only 2 million. The incident was captured on YouTube before it was reversed.

    ■Knight Capital Group in the US lost $440million when an automated trade went horribly wrong, sucking 150 stocks into the vortex.

    ■On Tuesday, there were four trades of one share in BC Iron at 11.16am at $2.65 each. At 11.20, the price surged to $4.64 in a nanosecond for no reason. Five minutes later, the ASX suspended trading for two minutes, then allowed the trades. The stock immediately dropped to $2.65.

  2. It's just as easy for a human to fat finger a stock... LoL... Computers are prone to computer errors just as humans are prone to human errors.