Source: Wall Street See
Due to a technical glitch in the NYSE, someone bought stocks of Berkshire Hathaway for $185.1 per share, which was originally worth more than $600,000 per share, during a brief suspension of trading. Once the glitch is fixed, the trade will take effect and the value per share will increase by more than 3,400 times. NYSE later decided to cancel any individual stock trades of Berkshire Hathaway that were below $603,718 due to technical issues during the period of errors.
On the evening of June 3rd Beijing time, technical difficulties on the NYSE caused...$Berkshire Hathaway-A (BRK.A.US)$/$Berkshire Hathaway-B (BRK.B.US)$The stock price showed a dramatic drop of nearly 100%, briefly falling from $620,000 per share to $185.1 per share, almost approaching zero.
Unexpectedly, someone accidentally “bottom-fished” 51 shares at a price of $185.1, with the largest deal being 8 shares. This means that once the trade takes effect and the system is fixed, the value of each share in the hands of this person will increase instantaneously by over 3,400 times. Netizens are guessing which lucky man bought it and which unlucky person accidentally sold it.
One netizen said, "If you invested $1,000 in Berkshire Hathaway this morning, you would now have $3.5 million. This is the result of a system glitch. It has been fixed. I just realized this."
Is it really true that you can make a profit without doing anything?
However, the NYSE subsequently announced that it has decided to "cancel" all erroneous Berkshire individual stock trades that occurred from 9:50 a.m. to 9:51 a.m. Eastern Time due to technical issues, the ones related to the "CTA SIP" system issue, and any trades with prices equal to or less than $603,718.30. In addition, the exchange made it clear that traders have no right to appeal this decision and hinted that trades for other individual stocks may also be cancelled.
Nevertheless, the market still reacted strongly to this rare event. Some domestic media mentioned that market insiders have noticed this super-bug and suggested that such trades that are obviously below normal stock prices should be treated as normal trades from a technical perspective. The stock price bug may have caused algorithmic funds to sell directly, as ordinary investors would not sell at such low prices.
Such technical issues are not the first time in the history of exchanges, and can usually be attributed to several major reasons: data errors, algorithmic trading errors, system upgrades or maintenance issues, flash crashes, and network attacks, among others. All of these factors can lead to short-term data or trading anomalies on exchanges. There is no shortcut to ensuring that everything goes off without a hitch.
For example, in the summer of 2012, Knight Capital Group lost $400 million due to a software error in just 45 minutes and went bankrupt, from a Wall Street giant. On May 6, 2010, the Dow plummeted without warning due to high-frequency trading and lack of market liquidity, causing the Dow Jones Industrial Average to drop more than 600 points in just five minutes.
In addition, exchanges may also experience trading function failures or data errors due to unexpected issues during system upgrades or maintenance periods. For example, on August 22, 2013, the NASDAQ exchange experienced a major technical glitch that resulted in trading being suspended for nearly three hours. This outage affected thousands of stocks and options, including the stocks of large technology companies such as Apple, Google, and Microsoft. The technical issue was believed to be caused by a fault in the exchange's system upgrade, particularly in the part related to its price quote distribution system.
The NYSE's quick response and subsequent ruling effectively contained the impact of this technical glitch, but the incident still caused some damage to the confidence of market participants and served as a reminder of the potential risks associated with modern trading systems.
Editor/tolk