You may have heard the term “Fat Finger Trade” in the past. In fact it is widely thought that the massive dip in prices in may 2010 was caused by a fat finger trade. So what is a fat finger trade? Well it’s basically when you hit a wrong digit on a keyboard and inadvertently make a wrong trade. In the case of may 2010 it’s thought that someone added an extra 0 to the end of their trade causing a mass sell off as a reaction to a massive trade.


So why am I mentioning fat finger trades? Well today I suffered a fat finger trade of my own. I was updating my stop on my one remaining Britvic position. I wanted to change the stop price to 386 instead I entered 356. (I used the numeric keypad on the side of the keyboard) With the number 5 being directly under the number 8 I obviously hit the 5 instead of the 8. Therefore at around 10ish this morning I received an e-mail from SpreadCo informing me of an executed trade. I was quite surprised by this thinking the price of Britvic must have risen to 386 really fast, thus stopping me out of the trade. When I checked the e-mail further I noticed the buy price was 356. I immediately thought this was an error from SpreadCo and they had brought me out of the trade. Then as the reality hit home I realised that I didn’t even check my new trade that I had created at 386. So there’s a lesson to learn form all this and it’s don’t be complacent when it comes to trading in anyway. Be it updating stop orders, placing new orders or even trading via a market order. Make sure you check the values you have input before clicking the make trade.


I was lucky in this instance that the trade continued to go in my favour and actually exited at almost a £100 profit. My initial reaction was to get straight back into the trade but I have decide to wait and see. For the time being I’m actually quite happy to be out of the market and waiting for new opportunities. With work how it is I just don’t have the time to look for new trades. I’m hoping this will change over the next few weeks as my work load starts to get a little lighter.


How I said I got lucky with this fat finger trade. It could well have been the case that the new price never got hit and the stock ended up passing my would be stop price of 386 and therefore losing me money and not conforming to my strategy.


With all that said it means the blog may go really quiet over the next few days/weeks depending on work etc. Therefore I’ll make the suggestion again about anyone that might like to guest post on the blog. How I said if you do I will send you a free copy of The Naked Traders Guide To Spread Betting courtesy of Global Investor Book shop. If you would like to guest post please get in touch. You can write about your own trading experience and possibly help others become better trades. Come on, you know you want to!




July 21, 2011 by Harry
Category: blog