How to Become A Millionaire in a few Minutes

Published: May 7th 2010
in Economics » World

New York Stock Exchange floor
Pic: wikimedia commons

Is it the Greek effect? A trade error? A lot of questions were raised after the Thursday selloff. In one of the most threatening half-hours in stock market history, the Dow plunged nearly 1,000 points before paring those losses – all apparently due to a trader error. The Proctor and Gamble stock plunged down 37 per cent in minutes, the rest of the stock market panicked and followed.


"We don't know what caused it," said Procter & Gamble spokeswoman Jennifer Chelune. "We know that that was an electronic trade...and we're looking into it with Nasdaq and the other major electronic exchange."


 Philip Morris, the world’s largest publicly traded tobacco maker, at one point had sunk 96 per cent to $2. It ended the day at $47, down just 3.5 per cent. The whole ordeal started shortly after 2:30 p.m., with the damage spreading fast. Some appeared to start selling, while others pulled out of the market altogether, taking all their buy offers with them. The Dow had fallen almost 1,000 points by 2:46 p.m., compared to its point at noon. A couple of minutes passed before it returned to the level of trade that it was on before. In those few minutes of trade, there were investors that gathered a fortune and others, that couldn't believe their eyes and lost it all. The rest is history, perhaps; or is this a follow up to winter 2008?


 Uncovering how $700-billion of U.S. stock-market value was vaporized in less than 10 minutes is the task ahead for market regulators. Both the Securities and Exchange Commission and the Commodity Futures Trading Commission said they were reviewing Thursday’s “unusual trading” and plan to make their findings and recommendations public.


 CNBC published that according to multiple sources, a trader entered a "b" for billion instead of an "m" for million in a trade possibly involving Procter & Gamble, a component in the Dow. Sources told CNBC the erroneous trade may have been made at Citigroup


Above this seemingly mistake, Investors are increasingly anxious that Greece’s debt crisis will spread to other countries. Many had hoped that the European Central Bank would announce bold steps to rein in borrowing costs on Thursday, which it did not do, prompting shares to lose ground. They don't forget the world financial crisis and the subsequent controversies like the civil fraud charges against Goldman Sachs Group Inc.


Arie Bonder, specialist on future contracts noted to Shalom Life that "What happened today surprised even myself. It is not the first time that I mention that it is a tradable market. What happened today was not only a program trading error. Don't believe what you hear and what you read. The 1000 for S&P on future contracts – we almost were there today.”


He warned that if this level will be broken, the correction will follow "I just hope, that is won't happen so fast."

Related articles: (stock market, dow jones, dow, greece, procter & gamble)

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