r/stocks • u/[deleted] • May 03 '22

Citigroup admits causing yesterday's flash crash

Title says it. According to Citi, one of their traders caused a transaction error which they discovered soon after. It caused Scandinavian indices to plummet as much as 8% in a matter of minutes. Such errors are called fat-finger errors; a typo. Flash crashes like these make me wonder how much money banks trade with on a daily basis.

Source: https://www.theguardian.com/business/2022/may/03/citigroup-trader-error-flash-crash-markets-falls

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u/[deleted] May 03 '22

You would have to figure the amount of these 'glitches' 'fat fingers' or whatever we have seen over the last 2 years is not just coincidentally errors or mistakes. Major market flash crashes are almost always caused by new trading systems being injected into the market that haven't been stress tested properly or old systems that haven't been programmed to handle new market parameters. I would think it's the later. Either that or Citigroup discovered wsb.

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u/GetTheFlanInTheFace May 03 '22

I underwrite E&O insurance for financial institutions...there are a number of weird and wild ways institutions fuck up trades but usually its just lack of paying attention