The New York Stock Exchange is planning to review trades made this morning just after the market opened. The stock exchange said that many trades made this morning were thought to be mistaken. It plans to review the trades and it expects “that most of the impacted trades will be busted.”
According to a Wall Street Journal Market Pulse piece, Amex, the Nasdaq Options Market and the Chicago Board of Trade were affected by the problem trades and all are reviewing the orders. The trades were placed this morning between 9:30 am and 9.47 am and impacted equities with tickers starting with letters from H to L.
NYSE Market problems
According to the information, this morning’s trades came from a single firm, though that firm has not been named. The trades are likely the result of a software malfunction at the trading house. NYSE Amex said that there were no problems on its end that caused the problem. NYSE Euronext (NYSE:NYX), the corporation that runs the exchange, saw its stock rise by a fraction on today’s market.
NYSE is likely to be able to strike them out or “bust”
This morning’s trades did not cause any havoc, and the NYSE is likely to be able to strike them out, or “bust” them without too much hassle. Rogue trades are becoming a problem as computer programs increasingly run the stock market, however, and that trend has not gone unnoticed by investors or by regulators.
A history of market failure
This morning’s mistaken trades are just the latest in a long line of technology problems that have influenced the market. The software that buys and sells stock, and the software that records the deals, is complex and it’s reasonably surprising that it doesn’t fail more often. Problems in the software are bad for traders however, and sometimes they’re very bad for the companyies that run the markets.
Last year in the fiasco that was the Facebook Inc (NASDAQ:FB) IPO, NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) software failed. That failure led to lawsuits and systems reviews for Nasdaq. The incident is still plaguing the company more than a year later, and its reputation has been significantly damaged.
The software in charge of the market is, like any other software, prone to failures and bugs. Most of the problems thus far have been solved in a reasonably painless way, but future errors may not be as simple to fix.