Placing an order on an exchange requires the correct ticker code to be input. If you want to trade in the food giant Archer Daniels and type ADMA instead of ADM, you are going to end up with ADMA Biologics instead.
If you pick the wrong day to make such a mistake you could end with a significant loss.
When traders get to the derivatives markets, the scope for making a mistake increases several times over. In addition to the correct ticker, you need to pick the correct expiry contract, as well.
All these nuances came into focus once more (as they have several times before) in this interesting case. In this instance, a trader entered the price for one commodity in energy based on the pricing of a different one.
It appears that Jonathan Alexander repeated something that was done to him “unknowingly”. That did not spare him from a $ 85,000 fine and a 9 month suspension from trading. (Read the ICE Futures Disciplinary Notice here.)
It is important to:
1. Know the tickers
2. Provide end-users with short descriptions that they can use to check what they are trading
3. Add a second confirmation before going ahead with an order.
Those minimize the chances of such operational risks; but will not eliminate them as traders do sometimes punch orders really fast and notice the error just as they are hitting enter.