On Tuesday, January 24th, the New York Stock Exchange (NYSE) experienced a technical issue that led to a brief trading halt for dozens of major companies just after the market opened.[0] The exchange determined that 4,341 trades in 251 ticker symbols should be “busted.”[0] Most of the trade breaks were processed on January 24th and the rest were expected to be processed the following day.[1]
At 9:50 a.m.[2] ET, the NYSE reported that all affected companies had resumed trading, with all systems back and operational.[2] A statement from the exchange revealed that the root cause of the glitch was a manual error involving the Exchange’s Disaster Recovery configuration.[3]
The NYSE then issued a follow-up statement that said that a Sell Short Restriction (SSR) had been erroneously triggered in a subset of NYSE listed symbols.[4] This SSR was deactivated for Wednesday’s trading.[5]
The companies affected included big names like Altria, Mastercard, McDonalds, Uber, Wells Fargo, Verizon, Rio Tino, Shell, AT&T, Lilly, Mosaic, Wells Fargo, Nike, Nucor, Transocean, Prudential, 3M, Newmont Mining, Southern, Union Pacific, Sony, United Parcel Service, Altria, Valero Energy, Occidental Petroleum, Royal Dutch Shell, MetLife, Visa, Walmart, and Exxon Mobil.[6]
The wild price swings and halts were triggered due to a limit up/limit down (LULD) bands being published immediately after the stocks opened that determined at what price a stock would be halted due to volatility.[7] If a stock traded above or below the bands, it would be halted.
The NYSE then noted that any trades in NYSE-listed symbols that did not conduct an opening auction and both occurred before 9:30:00 AM but before the receipt of LULD bands 9 (generally less than a second later) and executed at a price exceeding percentage parameters from the reference price (as defined in NYSE rules), will be declared “null and void.”[8]
NYSE Chief Operating Officer Michael Blaugrund said in a statement, “Such events are extremely rare, and we are thoroughly examining the day’s activity to assure the highest level of resilience in our systems.[9] We ended the day with a normal market close and expect a regular open on Wednesday.[10]
0. “NYSE: Stock trading glitch caused by Sell Short Restriction manual error” UPI News, 25 Jan. 2023, https://www.upi.com/Top_News/US/2023/01/25/NYSE-glitch-sell-short-restriction/9881674660480/
1. “NYSE glitch caused by manual error, 4.3K trades declared void” Seeking Alpha, 25 Jan. 2023, https://seekingalpha.com/news/3927784-nyse-glitch-caused-by-manual-error-43k-trades-declared-void
2. “NY stock exchange halted as technical issues cause major opening delay” Express, 24 Jan. 2023, https://www.express.co.uk/news/us/1725633/NYSE-stock-exchange-halted-Morgan-Stanley-Verizon-market-open-delay-dxus
3. “The Cause of the NYSE Issue Was a Manual Error” TipRanks, 25 Jan. 2023, https://www.tipranks.com/news/the-cause-of-the-nyse-issue-was-a-manual-error
4. “NYSE Says Short-Selling Restrictions Responsible for Technical Glitch” Barron’s, 25 Jan. 2023, https://www.barrons.com/articles/nyse-halts-stocks-technical-trading-51674572058
5. “NYSE Briefly Halts Trading in Dozens of Stocks” Barron’s, 24 Jan. 2023, https://www.barrons.com/articles/nyse-halts-stocks-51674572058
6. “New York Stock Exchange investigates ‘technical issue’ that briefly halted some trading” CNN, 24 Jan. 2023, https://www.cnn.com/2023/01/24/investing/nyse-halt-stocks/index.html
7. “NYSE’s Tuesday trading glitch explained” CNBC, 24 Jan. 2023, https://www.cnbc.com/2023/01/24/nyses-tuesday-trading-glitch-explained-why-some-of-the-trades-may-be-busted.html
8. “New York Stock Exchange system issue caused trading pauses at open (NYSE:ICE)” Seeking Alpha, 24 Jan. 2023, https://seekingalpha.com/news/3927386-new-york-stock-exchange-system-issue-caused-trading-pauses-at-open
9. “NYSE claims technical glitch for early trading issues” The TRADE News, 25 Jan. 2023, https://www.thetradenews.com/nyse-claims-technical-glitch-for-early-trading-issues/
10. “NYSE glitch affected more than 250 stocks, caused large price swings” Markets Insider, 25 Jan. 2023, https://markets.businessinsider.com/news/stocks/nyse-glitch-morgan-stanley-wells-fargo-stocks-price-swings-2023-1
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