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AP Twitter hack causes $US136.5 billion Wall Street loss

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F

Fusebox

Banned
http://www.smh.com.au/it-pro/securi...er-hoax-shakes-us-markets-20130424-2idbc.html

MOR-tweet-main-620x349.jpg


Hackers took control of the Associated Press Twitter account on Tuesday and sent a false tweet of two explosions in the White House that briefly shook US financial markets.


But within three minutes of the tweet's release, virtually all US markets took a plunge on the false news in what one trader described as "pure chaos".

Reuters data showed the tweet briefly wiped out $US136.5 billion of the S&P 500 index's value before markets recovered. Some traders attributed the sharp fall and bounce-back to automatic electronic trading.
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Is it just me or is the system broken? Should one fake tweet really have that kind of impact on the markets?
 
T

teh_pwn

"Saturated fat causes heart disease as much as Brawndo is what plants crave."
Lot of stuff is automated. But likewise as soon as the truth is revealed it bounced back.
 
T

Tamanon

Banned
Kinda a weird way to look at it. That money wasn't lost, it didn't just disappear.

But some of the automated algorithms that work off web-trolling...that's a little scary.
 
G

grimshawish

Banned
In Casino Royale the baddie had to actually do stuff.
Am serious gaf - the amount of fucking money you could make from hacking in this form is quite unbelievable.
 
F

Fusebox

Banned
Wait, was it actually an automated system that read the tweet and then reacted to it? Or did a human have to get involved somewhere.

In case you can't tell I don't know much about Wall Street outside of the original movie.
 
S

Sorian

Banned
lenovox1 said:
Yes, but if that was their intent, they'd go to jail.
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If I had seen the market collapse and had realized in those few minutes that it was a fake story and I had bought up and sold once they hit normal prices, would I have done anything wrong? I know, for sure, I would have been investigated but assuming I came back clean.
 
F

Ferrio

Banned
Basileus777 said:
A human had to be involved somewhere, I doubt machines can interpret tweets.
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You're wrong then


"An analyst said, 'That goes to show you how algorithms read headlines and create these automatic orders – you don't even have time to react as a human being.'""
 
F

Fusebox

Banned
Ferrio said:
You're wrong then


"An analyst said, 'That goes to show you how algorithms read headlines and create these automatic orders – you don't even have time to react as a human being.'""
Click to expand...

Holy shit. So if a Wall Street computer sees key words like 'explosion. white house. barack. injured' it just starts dumping stock en masse?
 
N

NYR94

Member
Ferrio said:
You're wrong then


"An analyst said, 'That goes to show you how algorithms read headlines and create these automatic orders – you don't even have time to react as a human being.'""
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There was a TED talk (I believe it was posted in a thread on NeoGAF) about how complex these algorithms are and how we're not even sure exactly how they work all the time. It's pretty scary the type of important decisions (in this case financial) we're leaving to computers.
 
M

mackaveli

Member
Basileus777 said:
A human had to be involved somewhere, I doubt machines can interpret tweets.
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There's algorithms that computer trading follow. For example they were saying, bomb, terrorist, or white house or anything long those lines can automatically create a sell off for a firm.

Also when the FOMC releases the minutes every month the programs read the text really fast and trade based on that depending on the type of words used in the text etc. This causes the market to either go up or down quite quickly on the minutes and then when people actually digest it the market can reverse course.
 
E

ElectricBlue187

Member
Can Crusher said:
Kind of?

It's not like computers read the tweet. Right?
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Yes, they can and do. This is not the first time computers have done this chasing some errant fluctuation

What happens is one computer reads there's an explosion at the white house and dumps a ton of stocks, the other computers see it happen instantly and dump theirs as well and it sets off a chain reaction.
 
M

mackaveli

Member
Ferrio said:
You're wrong then


"An analyst said, 'That goes to show you how algorithms read headlines and create these automatic orders – you don't even have time to react as a human being.'""
Click to expand...

Yeah I was watching it live on my computer screen and I was too slow to even react on buying or selling anything. I saw the Dow go from 150 to -15 then back up to 80 to 150 in a span of a minute or so and I was like yeah I can't trade this. By the time I previewed my orders the bid/ask spread changed so fast.

And there was no way I would do any market orders.
 
B

B-Dubs

No Scrubs
Fusebox said:
Holy shit. So if a Wall Street computer sees key words like 'explosion. white house. barack. injured' it just starts dumping stock en masse?
Click to expand...

It's not often that AP gets their twitter hacked. That said they should change it so that it goes by the website.
 
Tesseract

Tesseract

Banned
informational theories rising to the top, bubbling, frothing like a macho man savage sleighting cream crop cup promos.
 
R

RevoDS

Junior Member
Pretty sure some people got killed with stops and what not today.

Can Crusher said:
Kind of?

It's not like computers read the tweet. Right?
Click to expand...

Apps exist that can understand and summarize an entire news article into a single entirely coherent paragraph on a smartphone, and you don't think algorithms running on financial institutions' high-speed trading computers can understand a simple tweet?

Welcome to 2013.

HFTs can pretty much do anything nowadays. Algorithms make up more than 80% of daily volume on the NYSE.
 
S

SA-X

Member
Notrollious said:
Smart trading algorithms can read and learn certain trends and words from news articles, so for all intense and purposes, they can.
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Yep, there are machine learning algorithms whose whole purpose is to read news articles about companies and the world in general, classify the news as positive/negative and then trade based on that information. That's why you see gigantic gains/drops all the time before any human being could have a chance to process what is going on. The finance companies are basically tech companies now.

Reading Twitter tweets as an input source might not be the best idea however, lol.
 
E

Ether_Snake

安安安安安安安安安安安安安安安
NYR94 said:
There was a TED talk (I believe it was posted in a thread on NeoGAF) about how complex these algorithms are and how we're not even sure exactly how they work all the time. It's pretty scary the type of important decisions (in this case financial) we're leaving to computers.
Click to expand...

A big risk practically never mentioned is how easy it would be to have algorithms that would communicate or work in tandem with one another, which wouldn't be possible with humans since it would need to involve so many people. Considering how few huge banks there actually are in the world, we could have markets completely manipulated by a handful of huge banks and we would have no idea.
 
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