Suspiciously scale-free stock price movements

[jon_leonard]

Looking at the price graph for Thursday's stock market crash, I was struck by how very close to exponential the curve looked. That suggests to me that the effect is a feedback loop, and not the result of an extra-large trade or other error

Comments

[ctd]

If there aren't such reforms, I wonder if it wouldn't make sense for every company with any amount of cash to put in automatic orders to buy their own stock in the event of such a crash. Accenture, after all, knows darn well that their stock is worth, if not $40, some double-digit percentage of that in any event short of Armageddon. Or if they see a Bhopal-size lawsuit coming, they can take the order away.

Or would that violate insider-trading rules?

[jon_leonard]

Usually that sort of thing is announced in advance. For the case of insiders trading, it needs to be; I'm less sure about companies doing share buybacks or secondary offerings. But posting a large limit order in advance would seem like a reasonable course of action. I'm not sure why it's not done (more).