Goldman Sachs prevailed over trading counterparties yesterday when NYSE Amex decided to bust several mispriced options trades initiated by the big broker.
According to the Wall Street Journal, the decision potentially saved Goldman hundreds of millions of dollars in losses.
Early Tuesday, right after the markets opened, a systems glitch caused Goldman to mistakenly sent out waves of options orders often at prices far from the prevailing market rate.
Counterparties were likely market makers and specialists, according to sources.
NYSE Amex officials spent all day Tuesday reviewing the trades, permitting those affected to appeal the exchange’s decisions by Wednesday morning. The exchange received a large number of appeals, but still decided to bust the trades.
