Typing Error Causes $3.5 Billion Trade for Company valued at $93 Million

[Raystonn]

He obviously put in a limit order to sell at 1 yen. That picked up every bid on the book, and every bid later placed on the book, until the order was cancelled or filled, or the 15% limit was hit. It's fascinating that there is a 15% limit, yet they allow you to enter an order well below the 15% limit. Their trading systems leave much to be desired.

If there had been no 15% downside limit, the only shares that would have been sold at 1 yen would be to traders who put in a bid at that price without any higher bids being on the book. If you were quick you could have made a bundle off this. But I wouldn't trust the money to stay in your account if you picked up shares at 1 yen anyway.

-Raystonn

 

[peilthetraveler]

I remember reading about some chinese trader last year i think it was that did the same thing....She had misplace a decimal point or something and traded 200+ million dollars or something like that....See this is what happens when you have a writing language where numbers and letters look like little houses.

 

[garbo]

If this had happened at the CME or CBOT, they would have busted all of the trades made by the little guys who bought in at a lower price and made sure the big client didn't lose a penny for their mistake.

Isn't that what has happened every time over the past few years when some clerk at a big broker "accidentally" sold something like 100,000 futures instead of 100?

 

[Bluedog]

Fat fingered typing costs a trader’s bosses £128m

http://www.timesonline.co.uk/article/0,,3-1917093,00.html

.....
.....

FALLIBLE MASTERS OF THE UNIVERSE

February 2005: A broker tried to sell 15,000 shares in music publisher EMI at 280¼p but instead placed an order for 15 million in a transaction worth £41.5 million

April 2003: A trader accidentally bought 500,000 shares in GlaxoSmithKline, the pharmaceuticals group, at £13.00 each when the market price was 70p less

November 2002: A market maker confused the price of Ryanair shares in euros and sterling, sending the London quote up more than 61 per cent, from 404.5p to 653.7p

October 2002: A keyboard error at Eurex, the world’s largest derivatives market, halted trade for three hours and caused its index to fall 500 points after an unidentified London trader entered the wrong price during a futures transaction

September 2002: A Eurex trader intended to sell one futures contract when the DAX, Germany’s index of leading shares, reached 5,180. Instead he sold 5,180 contracts, sending the market into a free fall. Five hours later the exchange announced the cancellation of a raft of other trades

December 2001: A trader at UBS Warburg, the Swiss investment bank, lost £71 million in seconds while trying to sell 16 shares in Japanese advertising giant Dentsu at 600,000 yen each. He sold 610,000 shares at six yen each

May 2001: A trader at Lehman Brothers mistyped a trade and wiped £30 billion off the stock market. He wanted to sell £3 million of stock but typed too many zeros and sold £300 million. The bank suffered a £20,000 fine for his clumsiness

November 1999: A dealer put his elbow on the keyboard and inadvertently placed 600 trades in 16,000 of the Premier Oil’s shares at 19p, worth more than £1.8 million

 

[murray t turtle]

Quote from FredBloggs:

so - if institutional traders are such hot shots with their ivy league (noodle league in japan) degrees, how come they are such a bunch of clowns?

BWAHAHAHAHAHA!!!

=================

That institutional trader got the numbers right;
just wrong numerical order

The sunnyside of it is J-Com is a Japan job recruiting firm ;
may have even more business ,even after trades settle.

 

[prt_systems]

All of these stories conjures up a picture of the pointy haired boss from Dilbert.

I wonder how it is that these firms are not immediately shuttered and the principals put in irons.

Its pretty easy to build compliance systems that examine EVERY trade before its sent out over the wire to be executed. Without the compliance systems flag indicating acceptance the trade never gets put on - either electronically or verbally.

My clients have these systems on-line and in operation. They paid a pretty penny to build them but they never have to worry about these issues. The systems are tested regularly with every possible scenario to ensure they perform.

We are a long time into the business of risk anlysis, model building and automated trading systems. Anyone that does not have these systems checking their traders should be shut down - it should be an auditing requirement set by the regulators. Clearly someone is not doing their jobs .....

 

[Sophomore]

Quote from peilthetraveler:

I remember reading about some chinese trader last year i think it was that did the same thing....She had misplace a decimal point or something and traded 200+ million dollars or something like that....See this is what happens when you have a writing language where numbers and letters look like little houses.

Funny as that would be, most (if not all) of them use the Arabic numeral system when dealing with computers.

What that guy did and the lady you mentioned did can't be put to anything other than pure stupidity.

 

[5yrtrader]

Quote from FredBloggs:

??

1 yen from 610k yen is bigger than a 15% fall!!!

it says there is a 15% limit on the upside - but clearly not a 15% limit on the downside.

does seem a bit odd

maybe its just another bit of the journalist getting their facts wrong - typical bloomberg

Quote from fxspeculator



"Shares of J-Com fell by the 15 percent limit to 572,000 yen at 9:30 a.m. yesterday"

Or maybe Freddy is the one that needs reading lessons. Use your head retard, why would there be a limit on the upside but not on the downside?

 

[FredBloggs]

Quote from murray t turtle:

=================

That institutional trader got the numbers right;
just wrong numerical order

The sunnyside of it is J-Com is a Japan job recruiting firm ;
may have even more business ,even after trades settle.

lol - reminds me of when i was on the floor and a jp morgan broker misread the futures market by 10 ticks (my assumption) and put out a call ladder way underpriced. she was new (first week in the job - and also chinese) but had the ego the size of her firms account.
anyway, yours truly snaps them up before she knows whats happened.

later her boss calls her over.

later she comes over to me and asks to bust the trade.

lol. as if. maybe if she was it a bit more humble and stopped looking down her nose at everyone i may have done. (this was at the time those annoying 'i work for jp morgan ads were on business tv all the time circa '99 - which made it worse in my eyes)

never saw her again. she never came back. oddly enough, jpm would never fill me either after that. wonder why!!!

i think these oriental types put way more value on personal performance and pride than we do. to make any kind of mistake is of deep embarrassment to them. kind of fatal as a trader (but she was paper - explains it all really)

 

[FredBloggs]

Quote from 5yrtrader:

Or maybe Freddy is the one that needs reading lessons. Use your head retard, why would there be a limit on the upside but not on the downside?

lol fuck me!!! another wanabee in our midst!!

had a bad day have we? lost more money have we - again - so we go and lose our cool. dear oh dear sonny - you should have learnt it after '5 years'. most of us take 5 months, not 5 years.

anyway, seeing as your such a damn hotshot - why not tell us all why there would be upside limits, not downside limits, when most exchanges who decide such limits want the market to go up to attract business???


some of us actually trade - cant read every post word for word can we. i guess you can though as your still on your simulator.

have a great day (for a change )