Live Chat! Canceled Trades and the Plummeting Market

From 1 p.m. to 3 p.m. ET today, the Fool.com editorial team will be hosting a live chat -- click below to join us!

Nasdaq OMX has canceled the trades of 296 companies from yesterday, including Accenture (NYSE: ACN  ) and Boston Beer (NYSE: SAM  ) , which both fell to $0.01 a share before rebounding back. Nasdaq has said there was no technical glitch on its end.

There was a glitch, though. As The New York Times reported:

One official said they identified "a huge, anomalous, unexplained surge in selling, it looks like in Chicago," about 2:45 p.m. The source remained unknown, but that jolt apparently set off trading based on computer algorithms, which in turn rippled across indexes and spiraled out of control.

Here's what we know: High-frequency trading accounts for between 50% and 75% of daily trading volume, according to the Times. When an erroneous trade hits -- like the rumored "billions" instead of "millions" fat-finger trade -- chaos and volatility ensue. As we wrote yesterday, days like yesterday are why we prefer to focus on the long-term view here at The Motley Fool.

The NYSE and Nasdaq are now canceling trades from yesterday's most volatile period. Those who were burned will get a "do-over." Which got us thinking: If you could cancel any one trade of yours --- stocks, baseball cards, spouses--- what would you cancel?

Join us to discuss below! We'll be chatting from 1 p.m. to 3 p.m. ET.

Accenture and Nasdaq are Inside Value selections. Motley Fool Options has recommended a covered calls position on Nasdaq. The Fool owns shares of Nasdaq. The Motley Fool has a disclosure policy.


Read/Post Comments (8) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 07, 2010, at 12:33 PM, mikecart1 wrote:

    I think they are just creating new rules by the day. It is like beating someone in a big poker hand when he doesn't know he has the better hand and folds because he is new at poker. This country is a disgrace.

  • Report this Comment On May 07, 2010, at 1:44 PM, DMcLloyd wrote:

    Exchange guys, could you, please, cancel a couple of my trades as well? There must have been a glitch in a system!

  • Report this Comment On May 07, 2010, at 1:55 PM, ragedmaximus wrote:

    Gee i went in am cause the jobs report came out then premarket shot up then went to zero at 930 then it dropped like a rock i sold for a loss then themarket was crashing a obama comes on and the market goes back up now it doesnt know what to do and neither do i except im taking my money and keeping it for a few months screw this market i give up for now nothing is worth anything except when i put it into my bank account.

  • Report this Comment On May 07, 2010, at 3:07 PM, ragedmaximus wrote:

    KO is the trade for the next 2 months!!!!!!! alot of defense stock money pouring back into coca cola plus a dividend in june! STRONG BUY BACK to 60 next month!

  • Report this Comment On May 07, 2010, at 3:43 PM, mkyorai wrote:

    Actually, as it turns out, it wasn't a computer error. Someone at City just accidentally divided by zero. Hate it when that happens...

  • Report this Comment On May 07, 2010, at 9:31 PM, stokerz1 wrote:

    Hi, I am a very new investor with stocks, and I noticed that people in this chat seemed to be ready to start buying some stock shares next week after the volatile week we've had. Why are people not buying today, but rather next week? I am just trying to build my investing knowledge, so all insight, knowledge, and advice is welcome! Thanks.

  • Report this Comment On May 07, 2010, at 10:55 PM, ozzfan1317 wrote:

    Volitility and fear are a investors best friend as Buffett said buy when there is blood in the streets and its looking like the streets are getting bloody once again almost time to go shopping :)

  • Report this Comment On May 07, 2010, at 10:55 PM, ozzfan1317 wrote:

    Volitility and fear are a investors best friend as Buffett said buy when there is blood in the streets and its looking like the streets are getting bloody once again almost time to go shopping :)

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