Electronic Markets Went Off Rails Last Week

Sell-Buy.gif

Glitches on several electronic exchanges (NYSE Arca, Nasdaq, BATS Trading and Direct Edge) last Friday led to tens of "thousands of canceled trades and stuck some investors with unexplained losses," the Wall Street Journal reports.

After the Security and Exchange Commission (SEC) announced its ban on stock-short selling, the WSJ says that "dozens of stocks and exchange-traded funds changed hands on electronic exchanges at bizarre prices. Some were more than double their closing levels Thursday; some were at unnaturally low prices, such as one penny."

Exchange officials blamed the problems on confusion over the SEC ban, as well as high trading volumes, but they can't pinpoint as of yet the root cause of the problem.

At least 40 stocks and as many as 80 many have been involved. Traders who thought they had won big and others who have been stuck with losses are not happy.

Related Stories

Risk Factor

IEEE Spectrum's risk analysis blog, featuring daily news, updates and analysis on computing and IT projects, software and systems failures, successes and innovations, security threats, and more.

Contributor
Willie D. Jones
 

Newsletter Sign Up

Sign up for the ComputerWise newsletter and get biweekly news and analysis on software, systems, and IT delivered directly to your inbox.

Advertisement
Advertisement