WASHINGTON, August 22, 2012 – The NASDAQ has issued the following updates on its website, addressing a nearly 3-hour trading outage reportedly linked to technical problems:
“Equity trading in NASDAQ Listed Securities is resuming at approximately 15:10 [3:10] ET… PHLX [Philadelphia Exchange] will resume trading in ALL option classes at 15:25 [3:25] ET. Trading on NOM and BX Options will resume at 15:30 [3:30] ET. Normal intraday $5 wide quoting requirements will be in place for all option markets.”
Trading on the NASDAQ had been halted shortly after noon. Other exchanges continue to trade normally, save for NASDAQ issues, and the market is currently up on modest volume.
According to the Associated Press, this trade disruption “sent brokers scurrying to figure out what went wrong and raised new questions about the pitfalls of computer-driven stock trading… The Nasdaq’s freeze echoed earlier stock market snafus, such [as] the sudden plunge in stocks in May 2010 that came to be known as the “flash crash” and the glitch-plauged initial public offering of Facebook last year.”
Today’s NASDAQ issue comes on top of a problem earlier this week with Goldman Sachs originated trades that is still being resolved.
Regarding today’s trading glitch, an earlier NASDAQ update indicated that rolling, quote-only (no trading) quotations could begin prior to the actual opening, likely in an effort to make sure the system is functional before actual trading occurs.
We’d suggest that any questions you have as to how this will unfold be directed to your brokerage, as implementations and timing may vary. The same applies to any trades you may have placed in the system that remained unexecuted prior to the NASDAQ trading halt in stocks and options.
At 2:45 EDT, NASDAQ indicated it “will not be cancelling open orders on the book prior to a re-open. Customers who wish to cancel their orders may do so and any customer who wishes to not participate in the re-opening should cancel their orders prior to the resumption of trading.”
The Nasdaq’s freeze echoed earlier stock market snafus, such the sudden plunge in stocks in May 2010 that came to be known as the “flash crash” and the glitch-plagued initial public offering of Facebook last year.
And again, we’d repeat our earlier advice for retail traders: try to avoid getting in at the re-opening as trading could be quite volatile. In addition, placing market orders in a situation such as this one is, in general, highly inadvisable.
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