A faulty switch wrecked the trading flow of more than $5 billion in tech stocks yesterday on the Nasdaq – sending angry traders to the exchange’s archrivals to do business.
The 85-minute glitch came at a bad time for the Nasdaq Stock Market as it struggles against competing electronic systems that claim they’re better – such as Archipelago and Instinet.
Some traders were incensed, even for what seemed like brief disruptions.
Matt Ruane, the trading head at Calyon Securities, said snafus bedeviled his people for about 15 minutes.
“That’s a lifetime for some traders,” he said.
The disruptions began at the opening and persisted for almost an hour and a half. It caused about one in five of the Nasdaq’s listed stocks to be unavailable for buying or selling.
Traders said they didn’t hesitate to jump to the competition and warned they might stay there – untimely news for an exchange preparing to raise $100 million in an initial public offering.
Ironically, some of the IPO proceeds could be earmarked for equipment upgrades and repairs.
Nasdaq spokeswoman Bethany Sherman said the problem came when “a network switch failed.”
Some of the 20 percent of the exchange’s stocks experienced just intermittent problems.
The trouble also extended to Nasdaq’s trading of exchange-listed stocks, such as those listed on the New York Stock Exchange.
Stocks listed on one market can trade in others. The NYSE said it didn’t have any problems handling the Nasdaq stocks.
A full list of stocks that were affected wasn’t immediately available.
The Nasdaq’s Web site for traders mentioned intermittent problems with “different stock ranges,” including stock-ticker symbols between the alphabetical range of CKFR to CPNO.