Share wars: how the robots are robbing you
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The prevalence of computer-generated trading in the modern sharemarket has created an unpredictable, and sometimes dangerous, environment for investors.
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ROBOTS ON THE RAMPAGE
■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 stockâs 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.
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The prevalence of computer-generated trading in the modern sharemarket has created an unpredictable, and sometimes dangerous, environment for investors.
...
ROBOTS ON THE RAMPAGE
■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 stockâs 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.
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