Author: David Blackman
Date: 01:38:40 06/07/01
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On June 06, 2001 at 13:01:56, Graham Laight wrote: >Right now, if you want to buy the stock selection program "Tradingsolutions", it >will cost you $1,000. Presumably, it will allow you to select stocks and time >your purchases to improve your chances of making money. Ok. So every small stock trader in the world buys this and runs it on their internet connected ms-windows-98 box without a firewall, and probably with file sharing turned on for anyone who can connect, and probably they click on dubious attachments that arrive in email as well. Then all we need is a big stock trader who is slightly more dishonest than most. He hires a script-kiddie to break into all the small stock trader's computers and hack the program so it says "Sell XYZ". Then when XYZ drops to about 1/4 of it's current price and is just short of being de-listed, our big stock trader buys lots of XYZ stock really cheap. Then he hires the script-kiddie again to hack the program so it says "Buy XYZ". Then he waits for the price to reach about 4 times it's current price and sells. This is just one example of many ways computerised trading can make the market MORE volatile than it is now.
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