Nasdaq forced to cancel trades
14 December 2012 | 8528 views | 1
Nasdaq OMX was forced to cancel pre-market trades in nine stocks, including Citi and Goldman Sachs, yesterday after they caused huge price swings.
The exchange operator cancelled trades - which happened minutes before the opening of trading - in stocks which saw a move of more than 10% from Wednesday's closing price.
According to Bloomberg, the suspect trades saw Goldman Sachs fall by up to 20% to $94.01 while Hewlett-Packard plunged 79%. Citi, Western Union, Wells Fargo, AT&T, Kroger, Sprint and Ventas also saw wild swings.
The problem was caused by a broker which was making trades based on faulty market data, a source told the Financial Times.
Trading errors and the rise of electronic high-frequency trading have been in the spotlight ever since the May 2010 flash crash while Nasdaq has taken a reputational hit this year thanks to its botched Facebook IPO.