Citi trader error sparks flash crash in European markets
A flash crash in European stock markets yesterday was sparked by an error in a single sell-order trade by a Citigroup employee, it has emerged.
European shares plunged rapidly yesterday after a sharp drop in Nordic stock markets, when a trader made a calculation error involving an index which included Swedish stocks.
Citi acknowledged the cause of the plunge in a statement, saying that one of its traders made an error when inputting a transaction.
“Within minutes, we identified the error and corrected it,” the firm said.
Sweden’s benchmark OMX 30 plunged as much as 7.9 per cent before recovering to close 1.9 per cent, while the brief contagion spread into the Europe Stoxx 600 index, spurring a slide of as much as 3 per cent before recovering to trade down 1.5 per cent.
A Nasdaq spokesperson confirmed yesterday that the plunge had been caused by a trader error.
“The reason for the drop was a sell event by a market participant. We have not identified any disturbances in Nasdaq´s systems,” a Nasdaq spokesperson in Stockholm said in an emailed statement.
“Furthermore, after a review, Nasdaq has not seen any reason to cancel trades that were made during this event.”