Wow, what a day on the stock market. The Dow dropped 1,000 points and then made a recovery, but it still closed down 347 points on the day. What caused this to happen? There is talk that it was a computer glitch. Others are saying that somebody erroneously clicked the 1 Billion Button instead of the 1 Million Button from their desktop! How could a $42 stock sell for one cent for a few minutes during the trading day? Was this truly an error or was this stock market manipulation?
This calls for new rules being in the stock market don’t you think? Or is this behavior going to be allowed to continue and worsen? Where’s the motivation to trade if we can’t do it with confidence if, out of no where, we can end up loosing our live savings through a loophole in the online trading system?
At one point today that VIX had risen over 66 percent. Online brokerage platforms were down for nearly a full hour. There was nobody to call. There was nothing we could do. Our life savings were completely out of our hands. Billions of dollars were lost by retail investors due to this technological meltdown. Many investors will be forced to sell their homes.
Since Institutions have the ability to make thousands of trades per second using the internet, with the click of a button, anyone can cause the Dow to drop another 1,000 points. This is a serious problem. Is the stock market really that easy to manipulate? The financial welfare of a nation hanging in the balance at the mercy of a single mouse click! One can only hope new regulations are put in place immediately to prevent something like this from ever happening again. In all honesty, I think new regulations should be implemented and all transactions today should be reversed, and that trade should start up again based on the final prints from May 5th.
May 6 of 2010 will definitely go down in history books as one of the worst days in stock market history. However, it appears that it was caused by a software glitch or some type of manipulation allowed by today’s trading technology. Something has to be done about the situation for us to continue investing in the stock market optimistically.