Online Brokerage – What Happened on the Tuesday, October 28, 1997?
The trading volume record broke on Tuesday, October 28, 1997, when New York stock exchange and NASDAQ reached at 1.2 billion shares worth and 1.36 billion shares worth respectively.
At that day market went really down and many traders took the advantage of extremely low prices (of shares). It became the loud demand of many bargain hunting traders but at the same time many small investors’ remained unable to avail this opportunity or couldn’t reach their brokerage firms to get advantage of it.
Disastrously, due to increase flow of orders many online brokerages could not handle the large number of orders. It was impossible for brokerages to log on due to excessive orders.
Also phone lines of brokerages were busy too. Many investors invested a lot to buy shares.
Investor’s frustration aspired when losses heaped up and profits were missed. It was really a disaster for those investors who had invested almost their all sources.
Online chat rooms were filled with negative comments made by those investors who had to face a big loss, as the exchanges closed.
Different excuses related to system failure were presented by many brokers. Many brokerages online gave excuses of intense volume, which could not be handled or market didn’t have capacity to do so.
Also, many small brokerages gave excuses such as increase of flow of order but could handle only fewer clients and could not provide their services to huge number of clients.
Now, brokerage online industry has to deal with the new evil spirit which has risen due to the system failure incident. But it was not easy to solve these difficulties.
Online brokerages endeavor to attain various solutions to this huge problem. Online trading failure occurs due to increase amount of stock and swings which occur in prices.
Many trading industries have to suffer critically on consecutive days. Many customers of E*trade could not place order.
Traders have to face many problems due to the presence of large number of internet stock. Besides this, also traders across the board were unable to access the market due to problems.
If you experience this phenomenon, or know something about it, love to have your sharing at the comment section below.
Category: Case Studies, Online Brokerage
