Goldman trading glitch could cost more than $100 million
Goldman Sachs experienced a trading glitch Tuesday that resulted in a large number of erroneous single stock and ETF options trades. Many of the trades may wind up being erased but the error could still cost the firm upwards of $100 million, according to a person familiar with the situation.
"The exchanges are working to resolve the issue," a Goldman spokesman said in a statement. "Neither the risk nor the potential loss is material to the financial condition of the firm."
The trades involved NYSE Euronext, CBOE and Nasdaq OMX, according to reports.
A CBOE spokesperson said erroneous trades were being adjusted and busted up until 7pm CT Tuesday.
NYSE officials sent a notice to traders that they "anticipate that most of the impacted trades will be busted," the Wall Street Journal reported.
A person familiar with the situation said the losses for Goldman could be in the millions, or even upwards of $100 million, depending on how many trades were busted.
The botched trades occurred when Goldman's internal computer system that helps to determine where to price options mistakenly ended up sending orders at errant prices. Goldman is a market maker in the options market.
Earlier, the Financial Times reported that the NYSE was reviewing transactions in symbols beginning with "H" to "L" for the first 17 minutes of trading on NYSE's Amex platform, which includes options on equities such as JPMorgan and Kellogg. They also reported that other options exchanges, including CBOE and Nasdaq OMX, temporarily stopped accepting quotes from NYSE Amex in early morning trading and that the glitch could cost as much as $100 million.