
Operational risk possible cause of US equity nose-dive

Thursday's dramatic 998.5 point drop in US market prices was caused in part by lessons ignored from the 'Black Monday' UK stock market crash of 1987. The crash and rebound was reportedly initially caused by a 'fat finger' trading error, which then triggered automated selling programmes to sell off stocks, causing the drop to briefly spiral out of control.
Automated selling systems, designed to sell stocks during a trader's absence should a price fall quickly below a certain level, have assumed
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