Chaos on Wall Street after Wild Open

Hardly any details

“It was a bit of a mess,” said Justin Wiggs, managing director of equities trading at Stifel Nicolaus. “We had quite a few names that were affected. But once it reached a critical mass where more tickers were affected, investors became less frantic as they realized it was a bigger problem than just the one ticket they had a problem with.”

Details remain rare. But if there’s a lesson, Tuttle says, it’s to avoid market-on-open orders.

“Theoretically, these are the guys who lose the most if they don’t reverse those trades,” he said over the phone. “It’s making it hard for me to look at some of these stocks right now because there are some ups and downs that just aren’t part of reality.”

“I’d be surprised if some people didn’t get hurt. Yes they paused stocks but there were trades before the freeze and I don’t know what you end up doing about it.”

Matt Tuttle, CEO of Tuttle Capital Management

Computer glitches that cause erratic prices and disrupt trading for a few minutes are not uncommon on American stock exchanges. Perhaps the most famous was in August 2012 when flawed software used by one of the largest market makers, Knight Trading, flooded the exchanges with erroneous orders and caused volatility in the market. Last year, Citigroup’s London trading desk was behind a flash crash that sent stocks plummeting across Europe, while in Canada a software glitch caused a 40-minute outage on three exchanges.

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“Since the advances in technology since the early 2000s, I can count on one hand this has happened at the NYSE,” said Kenny Polcari, senior market strategist at Slatestone Wealth, who has spent four decades at the NYSE. The problem is likely to affect day traders and those using algorithmic trading, but not long-term investors, he added.

“If I was in the middle of a trade with the NYSE, it would have been rejected, so I would have sent it somewhere else,” he said. “If it had taken hours and affected other exchanges, that would be a different issue. But that didn’t happen.”

Bloomberg