Chesapeake Energy Corp (CHK)

[dwms07]

ANOTHER REASON FOR THE CRASH

Computerized trading using algorithms is now utilized by just about every big trader. Money managers, hedge funds, banks, and brokerage desks are handling trade decisions daily for billions of dollars using software models that are very similar to trading rules and platforms being used by other traders all over the world. The fact that the big boys are executing the same moves at the same time can lead to a sudden crash in the price of a heavily traded stock before someone can shut the computer off.

Then how long does it take them to wake up to what went wrong.

I fell certain these programs have built in sell signals when a stock drops too fast or too far. This can start a stampede to the exits by the machine traders, which is followed by the small fry.

The selling yesterday was way overdone.