- You just lost part of the deposit because of an unsuccessful transaction?
- You feel that you will fail in stock trading?
- The loss of a few hundred dollars seems huge?
Don’t worry, all is trifles in comparison with the failures of heroes, which will be discussed below. Yes, of course losses are a relative measure: if for someone $ 100 is the entire amount of the deposit, then their loss means the loss of everything that a man can have. But on the other hand, the trader in this case is losing money. Imagine, losing due to carelessness (because of carelessness, not because of wrong analysis) clients ‘ money? Imagined? Then stop thinking about the losses, read more!
Mistakes of traders: how to lose everything in a few minutes
It is believed that the cause of one of the greatest downs of the stock market in 1987 became the mistake of the trader Citibank. Then when selling futures was typed 16 billion instead of 16 million dollars. Later, the Bank announced that was not because of its employees, but such errors lead to huge losses.
In 2002, trader Bank Bear Stearns put a request for a sale of $ 4 billion, an estimate off by only three zeroes. Bid on the NYSE was exposed for 20 minutes before the end of the trading session, because significant losses can be avoided. However, some deals to employees of the exchange had to be cancelled.
Record loss was borne by the Japanese trader. Moreover, not only by the amount but also the consequences for all parties involved. Trader of the broker on the Tokyo stock exchange, exposing the request of the company J-Com, mixed price and quantity. And instead to offer to the market 1 share value of 610 000 yen, it is suggested price for 610 000 shares for 1 yen. The loss amounted to more than 340 million dollars, although after a few minutes the problem was corrected. Tokyo stock exchange have partly taken responsibility for the incident (read more about this case here), offsetting the loss. The management of Tokyo exchange resigned in 2 weeks.
A similar case a few months later happened in Russia. The trader mistakenly sold 1 billion shares of RAO NPP (337 million dollars). There was no damage in this case, as in Russia, transactions for the large sums held in the hand Treaty regime. That is, if both parties are in the transaction of claims, the obligations may not be enforced.
And again, Japan, again the error in the reversed digits of the number and prices of shares. 71 million pounds — a trader at UBS Warburg in December 2001 has placed 600,000 shares at a cost of 16 yen.
P. Morgan lost $ 50 million. Because of the messed up buttons. Trader Bank with an excellent reputation in September 2005, just mixed up buttons and sold equities not from Nikkei 225 index but from Topix. After the discovery of the error, stocks had to be bought back, but at an inflated price.
The British trader of one of the funds in 2003, bought 500,000 shares in GlaxoSmithKline, paying for them with 13 pounds apiece at their market value 0.7 lbs.
And again, no luck for the Russians. In September 2006, the trader of investment company “Troika Dialogue” offered the market options on the RTS index for a total price 144 250 US dollars in a market value of about 4 million dollars. A request was satisfied by the buyers here.
5 million dollars lost company from Japan Tachibana Securities by selling 2,600 shares of the company Adways at a lower cost. The error was mentioned at once, but almost 1500 of securities had been implemented.
Each year exchanges are trying to automate e-Commerce more and more. However, orders and sell orders still put people, and hence such errors will be repeated in the future.
