I mean.. they *have* the logs, i hope. I mean they *have* some software anyway which does data-mining to analyze for unusual things....

"This is unacceptable. In this day and age and with the use of such complex technology, we should be able to make sure that our financial markets are effectively monitored and investors are protected." ... because protectig investors is more important than protecting the economy.

Who decides that? And what happens to a smart invester that buys stock at $0.01 that usually trades at $40, to quickly later sell it at $30? Will the $0.01 buys be cancelled, but the $30 sells not be cancelled? But that would leave you with a short position, having to buy them back at $40. May be very expensive.

All hearings are these days is a convoluted way for politicos to take cheap shots at someone to boost their popularity at home.

You are exactly right. The later sale would potentially NOT be cancelled if deemed "fair" and you would be left short from a horrible position. They will not "roll-back" subsequent transactions.

If you are fishing for out-of-market orders like that and think that they might be broken by the exchange then simply do not cover your position until a ruling is made. If you are buying at $0.01 then your downside is VERY limited. :) The exchanges only breaking trades that are 60% away or more is pretty lenient when the market was only (only being relative here) ~10% down during the worst part. However, it was also noted that the exchanges had discretion to break other trades that they felt were sufficiently out-of-market.

The real people who got screwed are the retail guys who had stop orders out there an got stopped out of positions are awful prices, only to have the market come right back up.

It's something for the politicians to do to continue painting a big red X on Wall Street so they can take it over and control it themselves. I'm beginning to think Congress' job is to take over things and run them in a constant state of deficient funds.

Stop-losses are a way for people with regular jobs to mitigate the risk of being in the market, so by having "no sympathy" for people doing their darndest hold on to their value is akin to saying they shouldn't have even been in the market in the first place.

Precisely. If you can't take the heat, stay out of the kitchen. Lots of OTHER people had automatic buy orders kick in when the stocks dropped, and they _made_ money on the deal. Would you be crying for them if the drop turned out to be long-term instead of ephemeral? Volatility is one of the risks of being in the stock market. You bet that any severe drop would be long-term, and you lost. They bet it would be ephemeral, and they won. I bet neither way (I have stock which dropped and recovered on Thursday, but no automatic orders) and came out roughly even.

If you want to be invested in equity but want someone else to manage the day-to-day risk, there are plenty of companies which will do that for you. You will of course have to accept a lower expected rate of return in exchange for the reduced risk.

You seem to have a misconception as to what the market is. It is simply a room (either physical, electronic, or both) in which buyers and sellers make trades. That's all it is. So, saying its unreasonable for a single trade to crash the stock market is a bit like saying its unreasonable for a single command like "sudo rm -rf /" to crash your computer.

I hate it how people want to change the rules of the game whenever their strategy stops working

First of all, stop losses are not a "strategy", they are a tactic. My strategy is to invest in solid, widely traded, predominantly blue chip companies or in broad indices via ETFs. None of these types of investments should gyrate 10% in value in a matter of minutes because that means hundreds of billions or even trillions of dollars are vanishing and/or appearing. Of course, sometimes oil wells explode and big companies can take an instantaneous hit in their market cap (stop losses salvaged a year's gains on my BP stock just one week ago). Those types of events are fortunately rare, affect one or a small group of companies and are what stop losses are mostly for. Thursday was more like a magician's trick. One minute the trillion dollars is in his left hand. Then a blink later it's in his right. I suppose it doesn't matter to you that the "left hand" was largely small investors like me and the "right hand" was hedge funds, high frequency programmed traders and banks, but to me something smells rotten.

So, excuse me for saying this, but I want money to be transferred from emotional, panicky investors to calm, smart investors,

How exactly does micro-penny programmed trading accomplish this? Positions are bought and sold in microseconds skimming micropennies on each share transacted. The computer with the fastest network access wins. This, you assert, is efficient allocation of capital? This is good because it transfers capital from "panicky emotional investors" to people who will better allocate it? What is the real economic benefit of this activity, because one undeniable side affect of it is to distort and destabilize the market.

I very rarely find myself in favor of increased regulation, but in this case I think the rules do indeed need to be changed. If the majority of people lose faith in the market capital allocation will be severely and negatively impacted.

So you punish the small fry that got screwed so the rich guys who made the decision for the government and their friends gain all the benefit?

Small guys are not making millisecond trades on the stock market. They might have a pension fund, they might invest long-term in a few companies. They're not sitting 16 hours a day at a super computer hooked right into the exchange, looking for things like this as a vulture watches for a wounded animal.

There's no 'punish' about it, if professional gamblers get their fingers burnt it's simply tough shit.

In this case, someone wanted to make an instant 300,000% profit by doing and creating nothing, just taking advantage of someone else's mistake.