Panic on the Trading Desk, Caught on Tape

Of all the days to invite a camera crew to spend the day at his trading firm, Steve Starker had to pick Thursday.

What was supposed to be a fun event – Starker's institutional brokerage, BTIG, was holding its eighth annual charity day to raise money for foundations like Make a Wish and Autism Speaks – instead became a scene of chaos as markets plummeted and 200 panicky stock traders burst into hysterics.

It happened while CNBC reporter Bob Pisani and his camera crew looked on. For Pisani, who normally reports from the floor of the New York Stock Exchange, it was a different perspective. Normally what happens behind closed doors at a Manhattan trading firm, stays behind closed doors.

Click here to see video of panic on Wall Street

For Starker it was a scene out of movie.

"Unreal," he said. "Pure panic like I've never seen."

"It was amazing to be on the desk and see the reaction," said Pisani, who described what he heard around him at the height of the panic as the loudest amount of screaming in New York City since perhaps The Beatles played Shea Stadium.

The day started pleasant enough. Around 1 p.m. Pisani filmed a live spot featuring special guest on the trading floor, actor Michael J. Fox, who discussed his foundation focused on Parkinson's Research, one of the beneficiaries of the event.

In all, BTIG supports 100 charities. Meanwhile, with traders going about their business, BTIG's global sales chief Rick Blank joined in the segment, talking about uncertainty in the market. At that moment, the Dow was down about 120 points. About an hour later, all hell would break loose.

Whether it was an erroneous key punch leading to an accidental multi-billion dollar sell order that spooked the market or a cascading series of computer glitches, the net result was the stock market went into freefall, beginning at 2:42 p.m.

By 2:47 p.m. the Dow, relative to an earlier high in the day, had dropped 999 points, the largest intraday plunge ever.

"There was chaotic selling, and people just screaming sell, sell!" Starker recalled. "And then it went quiet, and the selling stopped on a dime."

From Panic Selling to Panic Buying

And then: panic buying.

"Everyone was yelling buy! buy!" Starker said. Literally, it was like the final scene of 'Trading Places. There was more panic on the upswing.'"

Starker, like the rest of his team, had clients on the phone, and phones in both ears, but that didn't stop Pisani from trying to get him to do an interview on the fly.

"He's in my face asking me questions and I'm just spitting all over him," Starker said.

Eventually at around 2:54 p.m., CNBC cut to Starker live at BTIG where, looking like he'd seen a ghost, he recounted the scene for viewers around the globe. By that time, special guests like Fox and Yankees manager Joe Girardi had left BTIG after making a special appearance as part of the charity day festivities, though skier Bode Miller was still there hanging around when the panic occurred.

The Dow would make a comeback and more than that, BTIG raised $4 million for charity.

Pisani says he got some great footage and since trading was halted at the NYSE during the day he probably got a better sense of what the markets were really doing via his glimpse into a typical trading firm such as BTIG.

"It's a day I'll never forget," Starker said. "I hope CNBC comes back to cover it next year, but we can do without the biggest Dow point drop in history."

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