Nasdaq, which sells shares of some of the most prominent US technology companies on its exchange, said it had resolved a technical issue that had interrupted trading for more than two hours prior to Monday’s opening and that all systems were back online.
Nasdaq (NDAQ.O), which lists shares of some of the largest US technology companies on its exchange, said it had overcome a technical fault that had disrupted trading for more than two hours before Monday’s opening and that all systems were operational again.
The company did not disclose the severity of the problem, its second in months, but stated on its website that it was related to the matching engine, which is a software system that matches buy and sell orders.
“The Nasdaq Stock Market has rectified its previous matching engine concerns, and all systems are operational again. “Nasdaq will provide a full postmortem when available,” the company stated on its website.
The Nasdaq is home to thousands of equities, including those of iPhone maker Apple (AAPL.O), electric car producer Tesla (TSLA.O), and chip giant Nvidia.
Technical issues on exchanges can roil markets, undermine trader confidence, and draw scrutiny from the Securities and Exchange Commission.
According to a person familiar with the subject, the trading impact accounted for about 0.8% of total exchange traded volume.
Some companies had particularly wide spreads—the difference between what buyers bid for a stock and what sellers asked for—with the ask price, in some cases, far below the bid price, indicating weak market liquidity, according to Seth Golden, president of financial analysis firm Finom Group.
“The ‘ask’ was below the bid, consistently since 5:00 a.m. ET for a majority of stocks… some spreads had the ‘ask’ lower by as much as $1/share,” Golden said in a statement.
A dealer in Berlin attributed a small drop in Nvidia stock at 6:40 a.m. ET to the disruption. The trader speculated that it could have been due to inaccurate quotes being entered on the Nasdaq.
Nvidia’s stock declined from roughly $902 to $896 at around 6:40 a.m. before rebounding, according to Refinitiv data.
The chipmaker’s shares were recently up almost 3.5% to $908.67. The Nasdaq Composite Index rose 1.3%.
The issue has prompted self-help announcements against Nasdaq by CBOE (CBOE.Z) and the New York Stock Exchange (NYSE). Both were revoked later.
A “self-help” notification is sent by a trading exchange when another exchange is experiencing internal issues processing deals and orders that are routed through additional venues.
“Brokers can access other exchanges. So the system is properly configured,” said Joe Saluzzi, co-manager of trading at Themis Trading. “The system is redundant. Others will make up the difference.”
The Nasdaq problem disrupted orders sent through the “RASH FIX” order management system. FIX, or Financial Information Exchange, is a communication protocol that defines an electronic message exchange for transferring securities between two parties.
Outages at key exchanges have been mostly contained in recent years. In December, Nasdaq experienced a system problem that disrupted stock orders and impacted over 50 clients.
Last year, its rival NYSE experienced a malfunction that hindered the beginning of auctions for a number of stocks, resulting in widespread trading halts, confusion over whether orders were being honored at the correct prices, and the cancellation of trades in over 250 securities.
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