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Japan stocks rattled by $617bn 'fat finger' trading error | Japan stocks rattled by $617bn 'fat finger' trading error |
(about 3 hours later) | |
Japan's stock markets were rattled after a trading error caused more than $600bn (£370bn) worth of orders to be made and then cancelled. | Japan's stock markets were rattled after a trading error caused more than $600bn (£370bn) worth of orders to be made and then cancelled. |
An anonymous broker entered an over-the-counter trade for 42 stocks before swiftly cancelling it on Wednesday. | An anonymous broker entered an over-the-counter trade for 42 stocks before swiftly cancelling it on Wednesday. |
The transaction affected huge volumes of shares in blue-chip stocks such as Toyota Motors, Honda and Nomura. | The transaction affected huge volumes of shares in blue-chip stocks such as Toyota Motors, Honda and Nomura. |
Japan's Securities Dealers Association (JSDA) confirmed the mistake. | Japan's Securities Dealers Association (JSDA) confirmed the mistake. |
"A member company traded 42 issues at the off-exchange transaction at 09:25 on 1 Oct, 2014," JSDA said in an emailed statement. "This was, however, their error." | "A member company traded 42 issues at the off-exchange transaction at 09:25 on 1 Oct, 2014," JSDA said in an emailed statement. "This was, however, their error." |
"After all of these reports were cancelled at 09:43, the revised correct report was made at 13:44". | "After all of these reports were cancelled at 09:43, the revised correct report was made at 13:44". |
The so-called "fat finger" mistake, which refers to a human error made by mis-typing a trade, was for an order worth more than the size of Sweden's economy. | The so-called "fat finger" mistake, which refers to a human error made by mis-typing a trade, was for an order worth more than the size of Sweden's economy. |
The biggest order was for 1.96 billion shares of Toyota Motors for 12.68 trillion yen. | |
Some previous incidents of computer errors have resulted in severe consequences. | |
In 2012, US market-maker Knight Capital Group almost went bankrupt after it lost more than $450m when its computers made erroneous orders that couldn't be undone. The firm was later sold. | In 2012, US market-maker Knight Capital Group almost went bankrupt after it lost more than $450m when its computers made erroneous orders that couldn't be undone. The firm was later sold. |
Japan is the world's second-biggest equities market and has seen an exponential increase in the amount of trading done electronically. | Japan is the world's second-biggest equities market and has seen an exponential increase in the amount of trading done electronically. |
A lot of electronic trading takes place off its exchanges, or over-the-counter, and orders to buy or sell stocks are submitted and withdrawn regularly. | A lot of electronic trading takes place off its exchanges, or over-the-counter, and orders to buy or sell stocks are submitted and withdrawn regularly. |
Brokers are required to file a report within five minutes if there is an error. However, the size of Tuesday's cancellation was unusual and took traders by surprise. | Brokers are required to file a report within five minutes if there is an error. However, the size of Tuesday's cancellation was unusual and took traders by surprise. |
Japan's benchmark Nikkei 225 index fell by 0.6% on Tuesday, but its decline has been attributed to poor economic data. | Japan's benchmark Nikkei 225 index fell by 0.6% on Tuesday, but its decline has been attributed to poor economic data. |
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