Suspected trader error sends P&G and Dow plummeting minutes before close

Erroneous trade error sends P&G, Dow plummeting, prompts investigation

About a half a hour before the market closed today, a suspected trader error caused significant market volatility, causing the Dow Jones Industrial Average to lose almost 1,000 points (about 9-percent of the total index value), and later regaining most of the losses back prior to the closing bell.

It is believed an equities trader at an unknown financial intermediary accidentally executed a trade position with a “b” (indicating billion), instead of what was supposed to be with a “m” (indicating million) on a futures trade executed on the Proctor and Gamble stock (NYSE:PG).

It was initially believed a trader at Citigroup Financial was responsible for the error, however, the company said all of its systems were fine with no anomalies.

Citigroup says it is “investigating to find the source of today’s market volatility,” but declined to say whether a Citigroup trader was responsible for the mistake.

The Procter & Gamble stock later recovered, yet still closed 2.27-percent down to $60.75 per share. The closing price compares to $53.99 per share only thirty-minutes prior to the closing price.

P&G is now investigating to find the cause of the volatility and if an erroneous trade(s) were made on the company stock. It confirmed late today it was working with market indexes like NASDAQ to try and pinpoint the trade.

Although not confirmed, it is likely the Securities and Exchange Commission (SEC) will investigate to determine if the trades were purposely made to manipulate the market and to profit.

The significant losses on the Dow hinted the loss could have been from mounting volatility in Greece over the country’s debt problems, were today the Greek parliament passed new austerity legislation that aims to cut spending and increase taxes to ensure the country does not default on outstanding bonds that would put the country into bankruptcy.

Despite large, violent, and deadly protests in Athens, the new austerity measures will see cuts to Greek pensions, increased taxes, among other cuts that are designed to raise capital.

The Greek government passed the new motion from intensifying pressure from European partners who are going to provide funds valued at USD $147-billion as part of an EU and IMF emergency bailout for Greece.

One of the conditions of the bailout was for Greece to make fundamental changes that prompted the new austerity measures.


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Tahir holds a Bachelor Commerce Finance degree from Ryerson University in Toronto. He is planning to purse an MBA in Finance. Write to tahir@business2press.com
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  • 3alphadataentry

    What a mess.. Hope it does not affect other markets .. let's see if it doesn't turn out to be a black Monday

    H. Patel
    Data Entry India Company

  • mporgsoft

    If all it takes is 1 stroke of the keyboard to make the market plummet like it did our system needs a serious overhaul. What would prevent a disgruntled trader or even a terrorist using this same mistake to cause economical damage.

    • http://business2press.com Hercules K

      Absolutely, that is a very valid point. You would think there would be better control mechanisms that would stop something like that from happening…but I guess not…

  • Anonymous

    If all it takes is 1 stroke of the keyboard to make the market plummet like it did our system needs a serious overhaul. What would prevent a disgruntled trader or even a terrorist using this same mistake to cause economical damage.

  • Hercules K

    Absolutely, that is a very valid point. You would think there would be better control mechanisms that would stop something like that from happening…but I guess not…

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