Fat Finger Error
An accidental trading mistake caused by entering incorrect data—such as wrong order size, price, or ticker—into an order entry system.
What is Fat Finger Error?
A fat finger error is an unintentional trading input mistake where a trader or system enters incorrect parameters for a trade—most commonly the wrong quantity, price, or security identifier. The term originates from the idea of accidentally hitting adjacent keys on a keyboard or trading terminal. While individual investors can make small fat finger errors, the most notable incidents involve institutional traders submitting orders several orders of magnitude too large or at extreme prices, which can momentarily destabilize entire markets. The 2010 Flash Crash and a 2014 incident where a Deutsche Bank trader accidentally sent $6 billion to a hedge fund (briefly) are attributed to fat finger errors. Most exchanges and brokers now implement pre-trade risk controls—price bands, quantity limits, and order validation rules—to catch and reject implausible orders before they reach the market.
Example
In 2005, a Mizuho Securities trader in Japan intended to sell 1 share of J-Com stock at ¥610,000 but accidentally entered an order to sell 610,000 shares at ¥1 each. The erroneous sell order briefly wiped out billions in market value before it could be cancelled, and Mizuho lost approximately ¥40 billion ($347 million) on the error.
Source: Investopedia — Fat Finger Error