BROWSE

Fat Finger Error

Definition

A fat-finger error is a keyboard input error in the financial markets such as the stock market or foreign exchange market whereby an order to buy or sell is placed of far greater size than intended, for the wrong stock or contract, at the wrong price, or with any number of other input errors.

What is 'Fat Finger Error'

A human error caused by pressing the wrong key when using a computer to input data. Fat finger errors are often harmless but can sometimes have significant consequences for example, if the wrong number is entered in performing a mathematical calculation.

Explaining 'Fat Finger Error'

In the aftermath of the May 6, 2010, "flash crash" that caused a significant, rapid and unexpected drop in the Dow, one possible early explanation was fat finger error. The idea was that a trader had entered an order incorrectly, placing the order in the billions rather than the millions. In reality, such trading errors are unlikely because of safeguards implemented by brokerages and exchanges.


Further Reading


Fat‐Finger Trade and Market Quality: The First Evidence From China
onlinelibrary.wiley.com [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

Fat-finger event and risk-taking behaviorFat-finger event and risk-taking behavior
www.sciencedirect.com [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

The Further Theoretically Derivation and Empirical Analysis of the Black-Litterman Portfolio ModelThe Further Theoretically Derivation and Empirical Analysis of the Black-Litterman Portfolio Model
en.cnki.com.cn [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

Financial bubbles, real estate bubbles, derivative bubbles, and the financial and economic crisisFinancial bubbles, real estate bubbles, derivative bubbles, and the financial and economic crisis
link.springer.com [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

Physics and financial economics (1776–2014): puzzles, Ising and agent-based modelsPhysics and financial economics (1776–2014): puzzles, Ising and agent-based models
iopscience.iop.org [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

Conflicting codes and codings: How algorithmic trading is reshaping financial regulationConflicting codes and codings: How algorithmic trading is reshaping financial regulation
journals.sagepub.com [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

Human factors in financial trading: An analysis of trading incidentsHuman factors in financial trading: An analysis of trading incidents
journals.sagepub.com [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

Narratives of the Global Financial CrisisNarratives of the Global Financial Crisis
link.springer.com [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …

High-frequency trading, algorithmic finance and the Flash Crash: reflections on eventalizationHigh-frequency trading, algorithmic finance and the Flash Crash: reflections on eventalization
www.tandfonline.com [PDF]
… The objective of this paper is to analyze the adverse impact of an algorithmic trading error, given that more trading is now algorithmic or computer generated … The Everbright Securities fat‐finger episode suggests that algo trading errors can cause price shocks even in …



Q&A About Fat Finger Error


What are some consequences of fat finger errors?

Fat finger errors can sometimes have significant consequences for example, if the wrong number is entered in performing a mathematical calculation.

How do safeguards implemented by brokerages and exchanges help prevent such trading errors?

Safeguards implemented by brokerages and exchanges help prevent such trading errors.

What is a fat finger error?

A fat finger error is a human error caused by pressing the wrong key when using a computer to input data.

Leave a Reply

Your email address will not be published. Required fields are marked *