Nasdaq and other exchanges cancelled trades in Peet’s Coffee and Tea shares on Wednesday after erroneous orders triggered a steep rise in its share price in a matter of seconds.
This is the latest glitch in a number of stock market software faults, which has raised questions about the reliability of automated and high frequency trading.
According to the Financial Times, shares in the security jumped nearly five percent on unusually high volume just after Nasdaq opened for business in New York. The exchange said in an alert that it would cancel all trades at or above $76.11 executed between 9.31am (EDT) and 9.32am.
The retail coffee chain’s shares, which opened at $73.89, jumped to as high as $77.47 in the opening two minutes of trading.
The name of the firm or firms from where the trading error might have occurred have not been revealed.
This news follows software glitches at trading giant Knight Capital, which resulted in losses of £281 million, and also on Nasdaq’s exchange during the botched Facebook IPO. The latter error has led to market making firms claiming losses in excess of £316 million.
According to reports, the Securities and Exchange Commission is holding a roundtable next month to discuss concerns over software glitches and other trading errors.