‘Fat finger’ gaffe sees trader lose up to £400k in HSBC share purchase
The mistake resulted in the share price of Britain’s largest bank rising more than 10 per cent
A City trader is believed to have lost up to £400,000 in 30 seconds by accidentally buying HSBC shares.
The so-called "fat finger" trade resulted in the share price of Britain's largest bank rising more than 10 per cent and led to the suspension of its shares for five minutes.
The estimated loss at an unknown financial institution is understood to have happened because the trades were not spread out over a long enough period of time, making them vulnerable to sudden share price movements.
Shares in HSBC soared from 630p to 688p in a matter of minute before closing at 630.2p. The sudden spike in the share price briefly pushed the FTSE 100 into positive territory although it eventually closed down 5.83 points at 6,538.45. A spokesperson for the London Stock Exchange told The Independent the trade is standing as valid. HSBC declined to comment.
Traders believe that a similar "fat finger" trade prompted an 11 per cent drop in Diageo's share price, which today reported a slowdown in sales growth from 2.2 per cent in the first quarter to 1.8 per cent over the half.
One trader told Reuters: "There are various scenarios on what could have gone wrong. But the good thing is people shouldn't do it... getting penalised for doing it means they won't do it again."
Stocks previously hit by "fat finger" trades include US security software firm Symantec and American Electric Power last year.
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