Japanese broker makes £380bn ‘fat finger’ trade

Hand On Keyboard Jakub Krechowicz


Share trades worth more than the size of Sweden’s economy were cancelled in Tokyo on Wednesday as a stockbroker corrected what was probably the biggest “fat finger” trade ever.

Orders for shares in 42 companies worth 67.78 trillion yen (£380bn) were cancelled, according to data compiled by Bloomberg News. The biggest order was for 57% of Toyota – 1.96bn shares of the world’s biggest carmaker.

Trades were also scrapped for other big Japanese names such as Sony, Honda and Nomura.

The unidentified broker was able to cancel the trades because they were made through the over-the-counter (OTC) market, which gives traders time to cancel before completion. OTC transactions are carried out directly between the buyer and the seller and not through an exchange.

Ayako Sera, a market strategist at Sumitomo Mitsui Trust in Tokyo, told Bloomberg: “I’ve never heard of orders this big being cancelled before. There must have been an error.”

Fat finger transactions happen when traders enter the wrong figures when dealing. HSBC’s shares briefly leapt 10% last year when a trader mistakenly ordered 2.5m shares instead of $2.5m worth of shares in the bank, triggering further complications. In 2005, Japan’s Mizuho Financial lost 27bn yen when it was unable to cancel a mistyped share order in time.

The stockbroker whose trader made the record order will not suffer losses because it managed to correct the order.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for The Guardian on Wednesday 1st October 2014 13.46 Europe/London

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