Panic on the Trading Desk, Caught on Tape

May 7, 2010— -- 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."