Little-known exchange-traded note jumps 400 pct in odd move
NEW YORK, June 7
NEW YORK, June 7 (Reuters) - A lightly traded exchange-traded note saw its price rise at one point by nearly 400 percent and volume jump shortly after the start of trading on Friday, the latest in a series of unusual moves in equity securities.
Most of the errant trades have been canceled, Nasdaq OMX said in a statement.
The Elements Morningstar Wide Moat Focus exchange-traded note, which trades on the NYSE Arca exchange, opened at $16.61 and the price quickly spiraled upward, reaching a high of $80.86 within the first 7 minutes of trading.
More than 524,000 shares traded on Friday, more than 50 times the 50-day moving average volume of 10,415. At about 10:40 a.m. (1440 GMT), Nasdaq OMX said it and other exchanges would cancel all trades made at more than $18.55 a share - about 340,000 shares.
The ETN tracks the Morningstar Wide Moat Focus Total Return index, an index of 20 stocks with "wide moats," that is, a large margin of return of invested capital over the cost of capital. That index is up 10.3 percent through Thursday for the year.
The stocks in that index also have a sustainable competitive advantage in their industry; holdings include Microsoft , General Electric and Berkshire Hathaway . The notes were issued by Deutsche Bank's London office.
Representatives of the NYSE were not immediately available for comment.