Tarry for the Nonce

December 8, 2005

JCom Value Soars

Filed under: News — lmwalker @ 9:28 pm

An unnamed trader at Mizuho Securities caused a run on the bank:

The trader at Mizuho Securities, who has not been named, fell foul of what is known in financial circles as “fat finger syndrome” where a dealer types incorrect details into his computer. He wanted to sell one share in a new telecoms company called J Com, for 600,000 yen (about £3,000).

Unfortunately, the order went through as a sale of 600,000 shares at 1 yen each . . .

The slip caused immediate shockwaves in the Tokyo market as traders tried to guess which firm had made the mistake. Fearing the impact, traders sold shares in all Japanese broking houses and the sell-off led to the value of the Nikkei 225 falling 2 per cent . . .

It is thought that Mizuho, once it realised its mistake, sought to buy back 550,000 shares from itself in a desperate effort to limit the damage, which is expected to run into billions of yen . . .

As if the hapless trader was not unpopular enough, the firm also cancelled its end-of-year party, scheduled for last night.

I wouldn’t worry about his lack of popularity. I imagine he is more worried about his pending unemployment.

The article goes on to list other similar incidents, but the one that caught my eye:

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

Engineering seems such a safe place to work, by comparison.

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2 Comments

  1. for 600,000 yen (about £3,000).

    Unfortunately, the order went through as a sale of 600,000 shares at 1 yen each . . .

    Wow! Imagine being on the winning side of that trade! Someone’s partying tonight! Imagine, buying 50,000 shares [£236.92], then turning them around and selling them for 30,000,000,000 [£150,000,000] yen! Holy profit Batman!

    Comment by Andrew P. — December 9, 2005 @ 1:06 am

  2. You know, I have to wonder if perhaps they shouldn’t take a look at some of the trading software’s interfaces.

    Comment by Howard — December 10, 2005 @ 4:22 pm


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