Trading on options exchanges briefly interrupted Monday by tech glitch


The Nasdaq MarketSite in New York.Trading on U.S. options exchanges was briefly interrupted Monday afternoon after a tech glitch similar to the one that led to a more severe disruption for Nasdaq-listed stocks last month. (Scott Eells/Bloomberg News)
September 16, 2013

Trading on the nation’s options exchanges was briefly interrupted Monday afternoon because of a technology glitch similar to the one that led to a much more severe disruption for Nasdaq-listed stocks three weeks ago.

Problems with a software system administered by the New York Stock Exchange were to blame this time. At 1:40 p.m., the exchanges received a request to halt options trading, according to the NYSE. The situation was resolved by 1:50, and the options markets were informed by 2 p.m. that trading could resume.

The 20-minute halt occurred after the system that feeds options pricing data to the market went down. This kind of outage is a “rarity,” and the reasons behind it were unclear by late Monday afternoon, said Richard Adamonis, an NYSE spokesman. But the problems with the system — called OPRA, for Options Price Reporting Authority — came after it was upgraded over the weekend, he said.

On Aug. 22, the Nasdaq halted trading on all its stocks for more than three hours because of problems with the technology it uses to distribute price quotes to the public.

That high-profile meltdown prompted Mary Jo White, head of the Securities and Exchange Commission, to summon the heads of the nation’s exchanges to Washington for a meeting last week. The exchanges were directed to come up with concrete measures to address market vulnerabilities and report back to the SEC in 60 days.

On Monday, an SEC spokesman said the agency was monitoring the developments on the options market and discussing them with market participants as appropriate.

The systems that malfunctioned in both the stock and options markets aggregate all the bids and offers in their respective markets and provide an authoritative best price in one consolidated public feed. People familiar with the problems in the options market on Monday said that the OPRA system had trouble calculating the bid and best offer.

The nation’s 12 options exchanges trade contracts for the future delivery of a variety of commodities, such as oil and corn.

Dina ElBoghdady covers housing policy for The Washington Post.
Continue reading 10 minutes left
Comments
Show Comments

business

economy

Most Read Business