New circuit breaker financial technology introduced to help the market recover quickly from sudden crashes was used by the New York Stock Exchange to halt trades of Citigroup shares earlier in the week.
According to reports, a five-minute pause in trading of the stock was triggered by a reporting error.
The halt in trading occurred at 13:03 EST on Tuesday (June 29th) after 8,820 shares in Citigroup were placed at $3.3174, a figure
more than 12 per cent lower than the previous transaction.
Figures from the NYSE revealed that the price was 17 per cent lower than the closing price on the previous day.
Craig Peckham, equity trading strategist at Jefferies & Co, told the Wall Street Journal: “Obviously, once the trade hit the tape, it set
off alarm bells all over the place."
“[However], the pause in the market gave people time to digest what happened and the market impact appears to be relatively neutral," he added.
The new financial technology was introduced during May with Standard&Poor’s 500-stock index as a safeguard against ‘flash crashes’ following the dip in the markets seen on May 6th.
Stocks traded on the Dow Jones Industrial Average dropped by 9.2 per cent prompting the Securities and Exchange Commission to call for the circuit breaker to be introduced.
By Jim Ottewill
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