Business

NYSE says Tuesday’s trading glitch due to ‘manual error’

The time on the NYSE

Source: NYSE

The day after a major trading error on the New York Stock Exchange opened, the NYSE issued a statement about what happened: “The root cause was determined to be a manual error involving the exchange’s Disaster Recovery configuration at the start of the day.”

That’s all they say. In plain words, it looks like they tested a “disaster recovery configuration” that didn’t involve using the floor, and it didn’t reset.

It fits the facts as we know them.

Traders noted that both Designated Market Makers (DMMs) and floor brokers appear to have been frozen out of the order book used to build the opening print. No opening print was delivered in dozens of big name companies. “It was almost as if trading opened without the participation of the word,” said one observer who asked to remain anonymous.

What we do know is that dozens of stocks opened at prices well above or below their last day’s close. Most were halted shortly after the open under rules designed to curb excessive volatility, and most reopened five to 10 minutes after the open at prices much closer to Monday’s closing prices. Many orders to buy and sell shares did not enter the order book that determines the opening price, and the opening auction print did not occur in the affected shares.

Adding to the confusion was the announcement by the NYSE late Tuesday that some trades that took place right at the open would be suspended but others would not. Many are trying to figure out how much money they may have lost yesterday.

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