An incident on July 9, 2019 shocked PSE when Cebu Pacific's (CEB) stock price was traded at a lower price during the market run-off session. The stock's price plummeted from Php92 to Php58.
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| Closing Stock Price Cebu Pacific July 09 2019 |
It was said to be a trader error made by Quality Investment & Securities' trader(s). This mistake triggered a domino effect and other brokers initiated also a sell-off. Below is the screenshot of the jockeys involve on that fateful day (I've just limit the screenshot to the 1 million value mark).
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| Cebu Pacific Jockey List July 09 2019 |
Luckily, this happened during the closing session and transactions made for that day will usually take effect on the next trading day. Also, this kind of incident is not uncommon in the stock market field. As said by the news, the broker/trader contacted the parties involve to cancel their transaction. Most of them complied, but some insisted that the transaction should push thru. This maybe the reason why (take note of the word: maybe) the opening price the next day is at Php87 instead of Php92. Meaning, there are brokers who did not agree with the cancellation and insisted that the transaction is valid.
This kind of accident is normal in every stock transaction, no matter how advance the technology is, it is always a human being who is behind the system. We can consider ourselves lucky that it was a trader error. If it was an intentional and legit transaction… Traders will wallow in sorrow and have nightmares for several nights while investors will consider this as a "sale" to buy more shares to add in their portfolio.
Moral of the lesson is to be alert always.
Happy Investing and Trading!
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- Your Life In Perspective by Ælfræd "Elf Counsel" -
