Bank Of America Merrill Lynch Loses $10 Million In “Operational Error”
By PanARMENIAN
Bank of America Merrill Lynch sustained a loss of nearly $10 million due to an “operational error” in handling of stock option trades known as dividend trades by the company’s Merrill Pro unit, Reuters reported citing the Wall Street Journal.
The unit’s clients were not affected and the error has been corrected, WSJ said, citing unnamed sources familiar with the matter.
Bank of America Merrill Lynch is a division of Bank of America Corp (BAC.N).
Dividend trades involve placing trades a day before shares of a company or exchange traded fund issuer go “ex-dividend,” seeking to capitalize on a typical drop in share prices after that date.
Trading data released September 21 showed that nearly a quarter of call options on the SPDR exchange-traded fund were not exercised, suggesting a likely error in processing dividend trades in the contracts, the newspaper said.
