WOW COCO a BBB by all definitions except one - They reversed some trades and not others. UNREAL a $42 buy gets cancelled and the $53 sells stands - stock closes at $57 so client is out $4 a share because he is short - Something unjust here - either none or all trades cancelled.
Computer mishap sends stock on wild ride
By The New York Times
NEW YORK - A computer system gone amok combined with intensely competitive stock markets and indecision by Nasdaq officials to create wild trading in a single stock on Friday. As a result, some traders were left with big losses even though they had bought low and sold high.
The dispute led to finger-pointing.
Officials of some markets criticized the Archipelago electronic network for resuming trading in the stock before other markets did, and Archipelago faulted Nasdaq for not clearly explaining what was happening.
The stock involved was Corinthian Colleges, a company based in Santa Ana, Calif., that operates colleges in several states. But the action in the stock had nothing to do with the company.
The trading problem served to highlight the growing fragmentation of trading in Nasdaq stocks, with officials of competing markets relying on Nasdaq for regulatory decisions and trying to take business from it. The problem also showed how bad trades entered into one electronic terminal can quickly spread to all markets.
In the end, many trades were canceled. But that decision was made after the stock had first been halted and then allowed to resume trading without any statement that the earlier trades might be canceled.
One money manager, speaking on condition that he not be identified, said Friday night that his clients had bought 5,000 shares of the stock at $41.95 and then sold 2,500 shares at $52.99, while locking in profits on the other shares with a trade in options. When the earlier buy was canceled, the later trades left his clients having sold shares they thought they owned but did not.
"Instead of a gain, the clients are looking at a huge, huge loss," he said. "And they did nothing wrong." |
