IP: don't hit that key -- from Risks

[Dave Farber <farber () cis upenn edu>]

From: Chris Brand <cbrand () west raytheon com> 
Subject: German stock exchange bond futures goof 
Date: Thu, 19 Nov 1998 16:36:14 -0800
> From the Electronic Telegraph (http://www.telegraph.co.uk:90), 19 Nov 1998:
A junior trader cost his employers an estimated 10 million pounds yesterday 
after a training exercise went disastrously wrong and he ended up taking 
part in an 11.5-billion-pound transaction. The trader, who is believed to 
work for a German financial institution, pressed the wrong buttons on his 
computer and caused panic on dealing floors in the City. Screens flashed up 
with the news that someone wanted to sell 130,000 German bond futures 
contracts, worth in excess of #11.5 billion. [...]
The German-based trader's employers are contractually obliged to carry out 
the transaction, and will be forced to buy futures contracts in the open 
marketplace to complete it. One banker said: "His employers must have 
extremely lax controls. A trade that size should have sent alarm bells 
ringing." [...]
German bond futures are now predominantly traded on Eurex, a German-based 
electronic exchange, on which traders say it is relatively easy to enter the 
dealing programme instead of the training simulation programme. [...]
Chris [also noted by Nathaniel Borenstein <nsb () si umich edu> 
and "Koblizek, Vaci" <Vaci-Koblizek () deshaw com>. PGN]

_____________________________________________________________________
David Farber         
The Alfred Fitler Moore Professor of Telecommunication Systems
University of Pennsylvania 
Home Page: http://www.cis.upenn.edu/~farber