Computer Gliches on the Stock Exchange

[adciv]

Compounding yesterdays unailability[1] of the London Stock Exchange, another SNAFU cropped up yesterday as well. An old 2002 story reporting on United Airlines bankruptcy was reposted/printed in the Florida Sun-Sentinel. As best as I can tell, something pushed the story into the "Popular Stories: Business" section, where some people were unable to tell the date of the story and thought it was recent news. Compounding this, the article was then posted to Bloomberg (a large news financial site) by searching Google for news (possibly with a date change to 2008 as well). Following this, United shares plummeted from about $12 to $0.01 in the course of 5 minutes, prior to trading being halted and the stock exchange trying to find out exactly what the hell was going on. If you thought it couldn't get worse, the entire Airline Industry was affected by this. There was a massive drop in American Airlines,Delta,Continental and South West at about the same time (and those are just the ones I could think of to check).

Reuters, Forbes, BBC,LA Times

[1] I'd use crash, down, or something else, but that could refer to average of the exchange as a whole.

[Deacon]

Jesus.

They were probably using M$ Windoze!!!!!

[EvilElf]

maybe they should have been using MacOSX instead of Vista 64bit no updates.

[Deacon]

Man, if I'd noticed in time, I would've bought every little bit of penny stock I could get my hands on.

[BtEO]

LSE was running TradElect. Can't seem to find the exact OS, but it's one that runs the .NET framework…

[ampersand]

On the other hand, these are the airline companies and their stock. They're notoriously bad for being such underperformers.

[Deacon]

Meaning their stock is undervalued?

[adciv]

On the other hand, these are the airline companies and their stock. They're notoriously bad for being such underperformers.

Yeah, but that's merely why people thought it might be true.

Meaning their stock is undervalued?

No. They are doing worse than the rest of the market. Which is normal, actually.

[teddy]

Just think, some executive probably went down the hall to take a shit in the executive washroom, and by the time he got out the bank had repossessed his Bently

Oh, and I'm with Deacon, penny stocks from a real business would have been awesome. Blow 100 bucks on it, and if they really were bankrupt you'd only lose 100.

[ampersand]

Just a speculation here, but suppose this wasn't merely a glitch, but some nefarious hackers wanting to take a couple of stocks completely down to a penny? (And really, why not the airline group? They could dive and no one would think the wiser.) Since most stocks markets are computer driven, one would assume they would have security that would probably rival the government right? Or maybe was this a sign that maybe their security protocol ought to be reviewed and tightened?

Here's another possibility along these lines. These days, when the markets have excess selling pressure, most stock exchanges implement mechanisms ranging from dampers to complete halting of trades that are by and large computer program driven. How likely could a group of hackers remove that from the computer programming protocol so that if such a trend happens, it causes an immediate crash, like in the olden days?

[adciv]

1) Stock Exchanges have a method for reseting selling to an earlier point in the day, effectively voiding trades done on the exchange back to a certain time. Each trade has to be recorded for who did it to keep track of who owes who what at the end of the day.
2) The blocks may be implemented manually and (1) is always a possibility.
3) As to security, this was not on the exchange's site, but a news site that got picked up on a large and very well respected financial news site. Hackers had nothing to do with it.

[adciv]

Times UK gives a timeline on what the frick happened.