The NYSE Bell
The day after a major trade issue opened on the New York Stock Exchange, the NYSE released a statement about what happened: “The root cause was determined to be a manual error involving the configuration of the stock market disaster recovery at the start of the day.”
That’s all they say. Simply put, it looks like they tested a “disaster recovery setup” that didn’t involve using the ground, and it didn’t reset.
This corresponds to the facts as we know them.
Traders noted that Designated Market Makers (DMMs) and floor brokers appear to have been excluded from the order book used to create the impression of openness. No opening impression was provided in dozens of large companies. “It was almost as if the exchanges opened without the participation of the prosecution,” told me an observer who asked to remain anonymous.
What we do know is that dozens of stocks opened at prices well above or below the previous day’s closing prices. Most were halted shortly after opening under rules designed to mitigate excessive volatility, and most reopened five to 10 minutes after opening at prices much closer to Monday’s closing prices. Many stock buy and sell orders were not included in the order book that determines the opening price, and the printing of the opening auction did not occur within shares concerned.
Adding to the confusion was the announcement by the NYSE on Tuesday night that some trades that took place at the open would be canceled but others would not. Many are trying to figure out how much money they may have lost yesterday.