E-Minis Cause Some Major Worry

Twice this month, dramatic movements emanating from electronic stock-index futures rippled through pit-traded futures -- and cash markets as well. The damage in both instances was limited and relatively brief.

But questions linger about these separate cases of the tip of the tail wagging the proverbial dog and the possible effects of future episodes.

Because so much trading is computer generated -- program trading now regularly exceeds 40% of Big Board volume -- pessimists fret that future glitches in electronic futures could theoretically trigger a series of computer-generated sell orders. Those sales would send the market lower, trigger still more sell orders and devolve into a downward spiral. ...