Fat-finger error

A fat-finger error is a keyboard input error or mouse misclick in the financial markets such as the stock market or foreign exchange market whereby an order to buy or sell is placed of far greater size than intended, for the wrong stock or contract, at the wrong price, or with any number of other input errors.
Automated systems within trading houses may catch fat-finger errors before they reach the market or such orders may be cancelled before they can be fulfilled. The larger the order, the more likely it is to be cancelled, as it may be an order larger than the amount of stock available in the market.
Fat-finger errors are a product of the electronic processing of orders which requires details to be input using keyboards. Before trading was computerised, erroneous orders were known as "out-trades" which could be cancelled before proceeding. Erroneous orders placed using computers may be harder or impossible to cancel.
Deadlines for review & cancellation.
In order to have legal certainty at the stock exchange, all exchanges have tight deadlines to request a review and cancellation, if possible. At the NYSE, BATS, CBOT, NASDAQ, OMX and American Stock Exchange requests for review must be received "within thirty (30) minutes of execution time".
At the NYSE-Euronext Liffe (Paris, Brussels, Amsterdam), "Where a member has executed an Erroneous trade, he will have a maximum of 30 minutes from the time of execution within which he may contact Market Services to request an invalidation".
At the London Stock Exchange "any requests from member firms to cancel trades should be made to the Market Supervision department as soon as possible and in any event within 30 minutes of the trade time".
At the Singapore Exchange, "the matter must be referred to SGX-ST within sixty (60) minutes from the time the error trade occurred".
The Frankfurt Stock Exchange in Germany applies the following rules: in case of transactions in securities traded in Continuous Auction, the Mistrade application shall be submitted within two trading hours upon receipt of the execution confirmation pursuant to § 2 Paragraph 1 Clause 2. As far as transactions of securities other than structured products, which are traded in Continuous Auction, are concerned, the application term ends according to Clause 1 upon closing of trading hours for that day, so the mistrade application has to be submitted "within half an hour after the closing of trading hours" at the latest.
Exclusion of rescission rights.
In order to have legal certainty and in order to avoid the situation that courts have to decide ex-post if a trade should be binding or not, erroneous trade rules of exchanges usually exclude civil-law rescission rights.
This explains why banks usually have to carry huge losses when clearly erroneous trades occurred that have not been detected within 30 minutes.
Examples.
Fat-finger errors are a regular occurrence in the financial markets: