Derivatives sale behind London stock slump

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Tuesday May 15, 05:46 AM

Derivatives sale behind FTSE slump

LONDON (Reuters) - A sale of derivatives worth just under 300 million pounds dragged the FTSE 100 index down by over three percent at the close of trade, the Financial Times reported on Tuesday, without citing sources.

The FTSE 100 index, which had been down 70 points, plunged further to close down 206.3 points at 5,690.5 as a big sell order went through the market in the last few seconds of trade.

The deal, equivalent to 5,000 futures contracts, may have been organised to take place over the next few days but instead was carried out in one fell swoop, the paper quoted an unnamed options dealer as saying.

The bank responsible for the deal was unknown, but Tuesday's Daily Telegraph said U.S. investment bank Lehman Brothers was rumoured as being responsible.

The LSE was not available for comment late Monday, despite repeated calls.

But the FT quoted a London Stock Exchange spokesman as saying the close would not be restated and that the LSE did not expect any trades to be cancelled.

-- (M@rket.trends), May 15, 2001


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