Goldman Sachs Trading Glitch Could Prove Costly

Young Rae Kim |

Goldman Sachs experienced a trading glitch on Aug. 21, which could be cost the firm upwards of $100 million. The glitch caused a large amount of erroneous single-stock and ETF option trades, which the exchanges are attempting to resolve.

It is unclear exactly how many trades have been affected or how much the losses were.

"The exchanges are working to resolve the issue," said Goldman spokesman David Wells. "Neither the risk nor the potential loss is material to the financial condition of the firm."

The Goldman Sachs Group, Inc. (GS) has become the latest victim of a trading glitch, which draws attention to the reliability of the electronic trading system. Although, most of the faulty trades will be cancelled this does not guarantee that the firm will not suffer any losses.

Last year, Knight Capital was pushed to the brink of bankruptcy after the firm experience a $450 million trading loss after a trading glitch. A group of Wall Street firms had to bail out the company.

The error was caused by Goldman’s internal computer system mistakenly sent price orders at the incorrect price. One key stroke error can prove to be costly, in this case up to millions of dollars.

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Companies

Symbol Name Price Change % Volume
GS The Goldman Sachs Group Inc. 241.85 0.40 0.17 5,456,047
JMTKY Jumptec Indu Ag S/Adr n/a n/a n/a 0

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