Goldman Sachs Has $45 million Typo

And You Thought Your Typing Was Bad

The Economist Reports this week on an option product sponsored by Goldman Sachs in the Hong Kong  market that contained a small typo.  The Settlement Price for the option, apparently based on the Japanese stock market index was stated as

(Closing Level – Strike Level) x Index Currency x Exchange Rate

When it should have been

(Closing Level – Strike Level) x Index Currency/Exchange Rate

Now The Dismal Political Economist knows these exchange rates conversion things are tricky, because exchange rates can either be quoted in the target currency or the base currency.  Japanese Yen, for example are quoted at $1.00 = X Yen and Euro’s for example are quoted in 1 Euro = X $.

While this may be difficult for a college junior at a mid level University, one would think that the folks at Goldman Sachs are a little better educated.  Still, in the interest of helping, The Dismal Political Economist is willing to serve as a editor for the Goldman option contracts, and at $1 million fee per contract he thinks Goldman would be getting a bargain.