Another day, another trading glitch…
On Wednesday, the Nasdaq OMX experienced a six-minute outage in one of its quote dissemination channels, “specifically in symbols through PC through SPZ,” according to a statement from the exchange.
The outage occurred from 11:35 a.m. to 11:41 a.m. ET and stemmed from the same system -- the Securities Information Processor (SIP) -- at the heart of the three-hour outage that marred Nasdaq trading on Aug. 22.
At 12:24, the Nasdaq issued its statement, which concludes: “All quotes are currently disseminating normally. Trading has not been affected.”
Translation: Nothing to see here folks, keep moving.
While certainly not as damaging as the Aug. 22 outage or the botched Facebook IPO, Wednesday’s glitch is not going to help the Nasdaq’s battered reputation. Nor will it reaffirm investors’ faith in the integrity of the system on which the market is built.
“It’s very troubling,” says Todd Harrison, CEO of Minyanville.com and a former hedge fund trader. “Whether it’s the participation from John Q. Public or whether it’s the ability in this digitally dependent world for the markets to continue…it warrants attention.”
According to Harrison, the financial markets trade off four main pillars: fundamentals, technical, market structure and psychology.
“The waning integrity of the financial markets is paramount” and is at risk in part because of problems with how the market is functioning on a daily basis, he says. “The DNA of the market – the way it’s trading – is different as evidenced by the ‘flash crash’. And of course you have the government intervention.”
The government's heavy-hand is another issue hurting investors' faith in the market's integrity, to be sure. But while retail investors and market pros alike are easily agitated when it comes to the government's role in the market, they seem to be becoming accustomed to and accepting of regular failures in the daily functioning of the marketing, which is troubling on many levels.