And The Dow Came Tumbling Down

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?

Are we going to impose new rules and regulations into the stock market, or will this behavior continue and worsen? How can we continue to invest in the stock market with confidence if at any moment we could possibly lose our life savings simply through a loophole in the online trading system?

That VIX rose over 66 percent at one point today, and online brokerage platforms were down for almost an entire hour. We had no one to call and nothing could be done. The situation was completely out of our hands. Billions of dollars would be lost by retail investors due to this technological meltdown. I can only imagine how many investors lost it all.

Institutions have the capability of making thousands of trades per second over the internet. With the click of a button somebody can cause the Dow to drop 1,000 points. Is the stock market really that easy to manipulate? What are we going to do about this serious problem? The financial welfare of millions can be devastated by the click of a mouse. I hope new regulations come about immediately so this never happens again. I personally think that all transactions today should be reversed, and that trade should resume based on the final prints of May 5th and only after new regulations have been implemented into the trading system.

May 6, 2010 is definitely a date for the history books as one of the worse days in stock market history. Regardless of it being a software glitch or if it was some type of manipulation allowed by today’s trading technology, this situation must be handled and taken care of if we investors are to continue investing in the stock market with confidence.

Learn more about Trading Options with safety in mind at www.sjoptions.com. If you are tired of the same-old Traditional Option Strategies, then you’ll love our mentoring program.