Nasdaq said it will cancel stock trades on all exchanges that were more than 60 percent above or below prices at 2:40 p.m. New York time, just as U.S. equities plummeted.
The Dow Jones Industrial Average plunged almost 1,000 points before trimming its drop and ended down 347.80 points, or 3.2 percent, at 10,520.32. About $700 billion of U.S. stock- market value was wiped out in less than 10 minutes, according to data compiled by Bloomberg.
Nasdaq, which investigated trades between 2:40 p.m. and 3 p.m., said it will provide a list of stocks affected and the prices at which the trades will be canceled. The decision cannot be appealed. NYSE Euronext spokesman Rich Adamonis said earlier today “there were a number of erroneous trades.” Citigroup Inc. may have been the firm that made a potential erroneous trade, CNBC reported, citing “multiple sources.” The New York- based bank said it found “no evidence” of erroneous trades.
(Source: Bloomberg.com)
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Jim Cramer calls the whole thing
http://www.cnbc.com/id/15840232/?video=1487022682&play=1
From my broker:
Due to heightened volatility and market conditions that occurred earlier today, All equity exchanges have issued an Industry-wide Clearly Erroneous Ruling Policy Established for 05/06/10. An industry-wide decision to address potentially erroneous pricing from today’s trading has been initiated.
Please Note that:
-The specific time frame addresses trade executions between 2:40 p.m. ET and 3:00 p.m. ET
-The reference price is the consolidated last sale at or before 2:40 p.m ET
-Trades executed with a price deviation of greater than and less than 60 percent from the reference price will be busted.
-This decision may not be appealed
Additionally, your account trades and balances may be affected as a result. More information will be made available to firms tomorrow with regard to trade executions. We will be modifying account positions and balances as the exchanges relay that information to us. These updates will most likely occur through the trading day on Friday 5/7/2010.
Should you believe that the your executions, that occurred on 5/6/2010, falls in the above categories, please contact the trade desk tomorrow morning before trading out of any erroneous positions as a result of the Clearly Erroneous Ruling Policy.
Updates will follow as soon, via your software as well as emails and notices, as they are made available from Exchanges and we will promptly communicate with you as soon as possible.
Thank you for your attention to this matter.