BlackBerrys were buzzing inside Progress Energy in Raleigh, N.C.: in a blink, the 102-year-old utility had been virtually wiped out on Wall Street.
In the anxious hours that followed, the answers began to come clear: the harrowing plunge in the early afternoon of Sept. 27 had been a mini flash crash — a small-time version of the stock market’s wild day last spring.
Oh no! It’s Algos Gone Wild again! Get Waddell and Reed on the phone!
A wayward keystroke by a trader somewhere had unleashed a powerful computer algorithm that had devoured Progress Energy’s stock in moments.
THE MACHINES HAVE RUN WILD! ALGOS MUST BE STOPPED! GET ZERO EDITING ON THE CASE!
Progress Energy stock was trading at about $44.57 a share, and a dealer at an unidentified brokerage firm had entered a mistaken sell order into a computer that instantly drove the price to $4.57. Dozens of trades were declared void, and after a five-minute halt, normal trading resumed.
Look, for crying out loud. That’s not a “flash crash”. That’s not algos gone wild – “sell a squillion shares at $4.57 or better” in a 44.57 bid market doesn’t even need any sort of algorithm.
This is just a trader fat-fingering his quote.
It might sound all ooh-scary-the-algos-will-eat-your-brain, but that’s not what it is; the NYT’s doing nobody any favours by overhyping it like this.