From the May 8 Wall Street Journal:
“Some traders say one culprit for the quick downdraft might have been a type of trade called an “intermarket sweep order,” or ISO. ISOs, which some studies say account for nearly half of all trades, send trades to whatever exchange that has the best price. The order can remain there until it is filled—even if that means the price falls to near zero.”
Points will be awarded to anyone who can parse that paragraph to explain anything — anything — about the crash. Extra credit for those who can explain how an ISO “buy” order (which seems to be what’s being described) could contribute to a decline in price.
The New York Times contributes to the disarray:
‘“On Thursday, some sellers placed orders that were not fulfilled until prices had plunged as low as a penny a share. If sellers had placed “limit orders” instead, those transactions would not have happened, Professor Harris said.’
Let’s see – sellers placed orders that were executed at $0.01 per share. This sure sounds like a limit order to me. Even more points will be awarded to anyone who can differentiate what the Times described and a limit order. No fair using outside sources. You have to use the material as quoted. (You are allowed to refer to the entire article as cited below, however. But watch out. Devious editors have been known to alter content on the fly.)
 http://online.wsj.com/article/SB20001424052748703338004575230600732737716.html#mod=todays_us_page_one. URL may change and may require registration and/or subscription
 http://www.nytimes.com/2010/05/09/business/09trading.html?hp. URL may change and may require registration and/or subscription