The New York Stock Exchange, in conjunction with the SEC is to amend its rules to make it more difficult for traders to cancel option trades because of computer glitches
- It is to alter its guidelines for reviewing what are called “clearly erroneous trades”
- A month ago Goldman suffered a computer glitch that caused it to buy a huge number of unwanted option contracts over the course of just a few minutes. Many of these trades were then cancelled, reducing Goldman’s losses by hundreds of millions of dollars. But traders on the other side of the deals are left with exposures and losses.
- The new proposals are to allow mistaken trades to be ‘adjusted’ instead of completely cancelled
- Other matters before the SEC regarding exchange reform include ‘kill switches’ to stop trading during emergencies
More at the Financial Times: NYSE eyes changes to options cancellations (gated, but can be read with a free registration)
