Berkshire Hathaway’s turmoil has sounded the alarm for the financial sector (Dr. Ye Wenhan)

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This articleauthorDr. Yip Man-honis the chairman of the Asian Marketing Technology Association and writes a column for the Hong Kong Economic Journal“The Words of God“.

A technical failure at the New York Stock Exchange (NYSE) last week caused abnormal price fluctuations in many stocks, including Berkshire Hathaway A shares (BRK.A), which is run by “stock god” Warren Buffett, once again exposing the fragility of the financial trading system.

It is reported that the technical failure was caused by an error in the price limit issued by the Consolidated Tape Association Securities Information Processor (CTA SIP), which caused the prices of many stocks to fluctuate sharply at the beginning of trading. Berkshire Hathaway A shares plummeted 99.97% when the failure occurred, once reaching US$185.1 per share (about HK$1,443.78), whileactual valueThe price of the shares was US$627,400 (approximately HK$4,893,700) per share. In the one minute before the trading halt, a few transactions were completed at a price lower than US$603,700, and these transactions will be cancelled.

The specific cause of the technical failure is still unclear, but some reports suggest it may be related to the “Limit Up/Limit Down” price limits. These limits are designed to control sharp fluctuations in stock prices to maintain market stability. However, due to problems with the software version update, the price limits may have deviated, leading to the failure.

As technology develops, financial markets need to pay attention to loopholes to avoid being affected by the market. (Shutterstock image)

The incident highlights the fragility of the financial trading system. Modern financial markets are highly dependent on computer systems and data transmission. A small error can have a huge impact. This technical failure not only caused losses to investors, but also hit the confidence of the financial market.

The incident also raised concerns about financial regulators. Investors questioned whether these institutions can effectively supervise financial trading systems. In this failure, only a small number of stocks were affected, but it still had significant consequences for the market. If such failures spread to more stocks or the broader market, it would be disastrous.

At the same time, the development of FinTech has provided some solutions. For example, using BroadCast Unitedligent algorithms and machine learning technology to monitor the market and promptly identify potential problems and risks. The application of blockchain technology can improve transaction transparency and security and reduce risks in the middle links.

The Bajun Rebellion should be an opportunity to improve the financial trading system. All relevant units should strengthen cooperation and work together to improve the stability and security of the financial market. Only through comprehensive measures of technological innovation, regulatory reform and risk management can we build a stronger and more stable financial trading system and provide investors with a safer and more stable trading environment.