NEW YORK – A glitch again delayed trading on the NASDAQ (NASDAQ:NDAQ) as a human error left the exchange unable to transmit index values for nearly 45 minutes on Tuesday, leading to a temporary halt in options trading on some stock indexes.
According to Reuters, index values for the NASDAQ Composite, NASDAQ 100, PHLX Semiconductor, PHLX Oil Service Sector and PHLX Housing Sector went dark for part of the trading day on Tuesday. The lack of information forced the exchange to halt trading in those indexes around 12:15 p.m. until they were restored around 1:00 p.m. EDT. The NASDAQ 100, in particular, is the benchmark for the PowerShares QQQ Trust exchange-traded fund, one of the most heavily traded ETFs in the U.S. market.
Representatives for NASDAQ stated that ‘the disruption was caused by a human error performing an operational function which resulted in the incorrect delivery of data’ and was limited to ‘the ability of the system to distribute index data.’ However, the ‘brief disruption of service’ did not affect equity exchange operations. While the exchange was able to calculate index values, they could not distribute them.
NASDAQ has suffered several high-profile interruptions, including a three-hour shutdown on August 22 and the botched IPO of Facebook (NASDAQ:FB) last year. The disruptions have significantly damaged the reputation of the exchange, and is one reasons why several high profile tech companies, including Twitter (NYSE:TWTR), have chosen to list on the New York Stock Exchange (NYSE:NYX).
According to Stephen Massocca, managing director at Wedbush Equity Management, ‘I don’t know what it is, but it appears they have an unusual proportion of technical problems there. You would think they would be on their tippy-toes making sure everything was absolutely correct over there … at this point, it’s more than just luck.’
The Securities and Exchange Commission (SEC) have confirmed that they are monitoring the situation. ‘We have been in contact with market participants as is our standard practice and monitoring developments as appropriate,’ said SEC representative John Nester.
According to options analytics firm Trade Alert, in NDX, 4,932 calls and 14,000 puts traded through 3:04 p.m. with less than one hour left of trading, below the recent combined daily average of 42,000 contracts.