Evaluation of the reliability in stock trading system
Golden Finger or Fat Finger
----Evaluation of the reliability in stock trading system
SYSEN5300
Project Proposal
Sep 25, 2013
Yicheng Huang
Yuhong Ding
Anuj Gautam
Introduction and Statement of the project
The stock trading system is always connoted as ‘Golden Finger’ for its amazing speed and striking efficiency to achieve the money snowballing in the stock market. High returns come with high risks. The reliability of the whole trading system is the key point deciding whether the market runs smooth and steady. However, one after another incident has happened during the last few years (Appendix 1) especially the Everbright case last month in different markets reminding us that there exists a snake in the grass within the current trading system. We conduct this project to evaluate the reliability of the trading system and find some feasible methods to low the risk of failure in the system.
‘Fat-finger’ is a colloquial term in securities markets. It generally refers to an incident in which the price, volume, and direction data of the orders are issued to the trading system without conforming to trading intentions, as a result of the trader’s operational error or a glitch in the technical system. According to which aspects of the orders go wrong, the ‘fat-finger’ errors can be categorized into price error, volume error and price and volume error. In terms of the causes, there are operational errors and technical ones.
In securities markets, “fat-finger” errors, huge or small, happen every day. It is only those large-scaled and influential cases that have caught our attention. Internationally, exchanges follow the securities laws, regulatory requirements and trading rules of their own countries in dealing with “fat-finger” trades. As countries have different law systems and exchanges’ different trading rules, there has not been yet a unified standard, and accordingly the resolutions differ. But on the whole, in their dealing with
----Evaluation of the reliability in stock trading system
SYSEN5300
Project Proposal
Sep 25, 2013
Yicheng Huang
Yuhong Ding
Anuj Gautam
Introduction and Statement of the project
The stock trading system is always connoted as ‘Golden Finger’ for its amazing speed and striking efficiency to achieve the money snowballing in the stock market. High returns come with high risks. The reliability of the whole trading system is the key point deciding whether the market runs smooth and steady. However, one after another incident has happened during the last few years (Appendix 1) especially the Everbright case last month in different markets reminding us that there exists a snake in the grass within the current trading system. We conduct this project to evaluate the reliability of the trading system and find some feasible methods to low the risk of failure in the system.
‘Fat-finger’ is a colloquial term in securities markets. It generally refers to an incident in which the price, volume, and direction data of the orders are issued to the trading system without conforming to trading intentions, as a result of the trader’s operational error or a glitch in the technical system. According to which aspects of the orders go wrong, the ‘fat-finger’ errors can be categorized into price error, volume error and price and volume error. In terms of the causes, there are operational errors and technical ones.
In securities markets, “fat-finger” errors, huge or small, happen every day. It is only those large-scaled and influential cases that have caught our attention. Internationally, exchanges follow the securities laws, regulatory requirements and trading rules of their own countries in dealing with “fat-finger” trades. As countries have different law systems and exchanges’ different trading rules, there has not been yet a unified standard, and accordingly the resolutions differ. But on the whole, in their dealing with