NYSE investigates irregular trading

Published:  2 Aug at 12 PM

A sharp swing in stock prices has caused the New York Stock Exchange to investigate a spate of irregular trading. Stocks in 140 companies were being traded at higher than normal volumes including American Airlines and Citigroup.

However, trades have only been cancelled in six stocks. The abnormal trading has brought back memories of the 2010 crash which saw 10 per cent wiped off the Dow Jones in a matter of minutes.

The exchange initially said it was reviewing irregular trading on the NYSE MKT and NYSE which had been flagged up during trading on Wednesday morning.

The stock exchange has since confirmed that it has cancelled trades made below or above certain prices on the stocks of Quicksilver Resources, American Reprographics Company, E-House (China) Holdings, Reaves Utility Income Fund, China Cord Blood Corp and Wizzard Software Group.

According to initial reports the abnormal trading could have been caused by an algorithm used by brokerage firm Knight Capital. In May 2010, an algorithm being used by a single trader caused US stocks to crash suddenly.