Trading error rocks index; also trading delayed by computer glitch : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Trading error rocks index; also trading delayed by computer glitch

By Gary Parkinson

A BUNGLED #20m trade by a Deutsche Bank dealer yesterday caused the FTSE 100 to tumble 208.6 points and trading to be suspended in an unprecedented 23 blue chip stocks.

The dealer placed an order to sell 102 stocks, which included every blue chip, without setting a minimum price. Trades were executed automatically by the Stock Exchange Electronic Trading Service against any buy order left in the system, no matter how low the price.

The 23 stocks were suspended by the exchange for five minutes.

Trading in any of the about 180 stocks on the SETS system is automatically suspended if a price moves by more than 5pc as a result of a single order. Among the stocks to be suspended, pharmaceuticals giant Glaxo Wellcome traded 120p below the market price at #18, while oil major BP Amoco traded 37.5 lower at 615p.

Deutsche is standing by all 200 executed trades, worth a total of about #20m. It is believed that the investment bank was trading on its own account and not for a client. It refused to comment.

A dealer said: "It looked like the whole screen went red. I would be surprised if the Deutsche trader who hit the button is still working." The Stock Exchange is believed to be looking into the circumstances behind the order. Its rules say member firms must have adequate checks to prevent rogue trades.

In an unconnected incident, computer failure delayed trading at London's Liffe derivatives exchange until about 10.30am following an upgrade to the system over the weekend.

-- Carl Jenkins (, September 11, 2000

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