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Strategies & Market Trends : Galapagos Islands
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To: mph who wrote (43509)7/7/2003 9:32:07 AM
From: Oral Roberts  Read Replies (1) of 57110
 
Well this is about the 4th time in recent memory that someone at a large house enters a SPX option sell order for 2000 instead of 20 or 200. This causes the futs to sell big which sets off program selling which sets off stops being run, etc. Everyone is made whole by them just taking a 2 or 3 minute period of time and just saying this period no longer exists. In hind sight and with advice from a friend who has been at this longer who claims this is the result every time so the thing to do is enter a second buy when the market is normal again and assume that the first will be wiped out. Then for the rest of the day don't trade that by either switching to the SPX or say the Dec Dow instead of the Sept.

Live and learn.

But what I would really like to know is how is it that someone keeps queering the market by fat fingering an option sale and doesn't get fired? It starts to make me wonder if someone isn't looking for a butt load of cheap calls and doesn't fat finger the sale, buy the hell out of calls and then say whoops we really didn't mean to enter 2000 and withdraw the whole thing. Options sales during those panic minutes are left to stand it's only the futs that become null. Many call buyers I'm sure panicked out of their SPX calls on that 10 point drop that happened only because someone entered a wrong number.
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