Fat finger error

What is a fat finger error?

A fat finger error is a mistake made while entering an order. The trader types or clicks something different from what they meant, such as the wrong size, price, instrument or direction.

The name comes from the idea of a finger pressing the wrong key. A "fat finger trade" is the order that results from such a slip.

A hypothetical example

A trader wants to buy a small position on a currency pair in MetaTrader 5. In the volume field they press a digit key too many times. The order goes out far larger than planned.

What changes:

• Exposure. The position's exposure, the total market value the trade controls, is many times the intended amount.
• Margin. The trade ties up much more margin. Margin is the deposit the account must hold to keep a leveraged position open.
• Price risk. Each pip of movement now changes the account balance by a much larger amount. A pip is the smallest standard price step on a currency pair.
• Stop-out risk. A normal price move can push the account to stop-out. Stop-out is the level where the platform starts closing positions because margin is no longer enough.

To see the real effect of a wrong lot size, enter both the intended and the mistaken volume in a lot or margin calculator on Calculators. Leveraged forex and CFD trading can lose money fast, and an entry mistake can make that happen within seconds.

Formal definition and edge cases

In market operations, a fat finger error is an operational error at the point of order entry. It is not a wrong view of the market. It covers:

• Quantity. An extra or missing digit, or a misplaced decimal point.
• Units. Lots confused with units or contracts. See contract size.
• Price. A limit price typed far from the market, which fills at once.
• Direction. A buy sent as a sell, or the reverse.
• Instrument. A similar symbol selected by mistake.
• Duplicates. The same order sent twice, or sent to the wrong account.

Cases that are usually not called fat finger:

• An order the trader meant to place and later regrets.
• A fault in an automated strategy. News reports sometimes still use the label for these.

Exchanges often have rules for cancelling or adjusting clearly erroneous trades. OTC brokers have their own terms for this, and those terms differ between providers.

Where the term appears

• Platforms. MetaTrader shows an order window and an optional quick-trading setting. With that setting on, a single click sends an order without a confirmation step. The executed trade then appears in the trade history and on the account statement.
• Exchange and broker reports. Incident reports and notices about cancelled or busted trades use the term.
• News. Sudden price spikes are often blamed on a fat finger. These can trigger a circuit breaker or look like a flash crash.

Related terms

• Fill and partial fill
• Fill or kill and IOC
• Day order
• Flash crash
• Fat tails and tail risk
• Risk management
• Trading glossary

Frequent questions

What does fat finger mean in trading?

It means an order entry mistake: a wrong key, field or button that sends an order you did not intend.

Can a fat finger trade be reversed?

Sometimes. It depends on the venue's or broker's rules on erroneous trades. Often the trader has to close the position at the current market price, which may mean a loss.

Is a fat finger error the same as slippage?

No. Slippage is a difference between the requested price and the price you actually get. A fat finger error is a mistake in the order you entered.

Do automated systems make fat finger errors?

Strictly, no. A coding or data fault in an algorithm is a system error. The media sometimes uses the term loosely for these cases.