Fat Finger Syndrome Costs Tokyo Trader $18 Million

Fat Finger Syndrome Costs Tokyo Trader $18 million.

A stock trader in Tokyo has the “curse of the fat finger” – mistakenly selling over $18 million of web advertiser Adways through a typing error. The trader’s simple typo cost his firm, Tachibana Securities, $18 million.

Fat finger syndrome is accidentally pressing the wrong button when entering details on a computer keyboard.

“It is known as fat finger syndrome . the occasional tendency of stressed traders working in fast-moving electronic financial markets to press the wrong button on their keyboard and, in the process, lose their employer a mint ..” (The Guardian, 9th December 2005)

The trader had apparently intended to sell shares in another firm with a trading code similar to that of Adways but with a much lower share price.

The trader cancelled the order but only after 1,482 trades, just under 10% of Adways’ total, had been completed.

“It was an input error,” said Tachibana’s vice-president, Takahiro Tsuchiya. “The trader noticed the mistake immediately and cancelled, but it was too late to stop some of the shares from trading.” (The Guardian, 20th June 2006)

I personally have never had a problem with fat finger syndrome or the curse of the fat finger. I hope I never do. Most online brokers, such as TD Ameritrade, will not execute an order if you do not have the funds available in your account, which limits the possibility of fat finger syndrome from occurring in daytraders like most of us who trade online. However, working a large firm, these simple safeguards are not always in place – as we have seen today in Tokyo and many times in the past. This latest case of the curse of the fat finger should teach us all to verify and double check our order entry details. I know I do. No one wants be the next trader the curse of the fat finger strikes!

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