Trading system glitch to cost Goldman Sachs

22 August 2013

Goldman Sachs could face losses of $100 million after a computer glitch sent erroneous options orders to American exchanges.

The internal system used by the institution to track how it prices options on behalf of its clients encountered a problem and sent out expressions of interest as orders, the Financial Times reports.

These orders were placed with inaccurate price limits for around 17 minutes and found themselves at several exchanges, including Nyse Amex Options, Cboe and Nasdaq OMX.

All transactions are now being reviewed by the exchanges and this is expected to take several days. Once this is complete the losses for Goldman can be identified.

However, the institution has already said in a statement: "Neither the risk nor the potential loss is material to the financial condition of the firm."

Chip Hendon, senior fund manager at Huntington Asset Management, told Bloomberg: "This unfortunately was an error and in the financial world an error can be a million-dollar error."

By Gary Cooper

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