Data Issue Halts Nasdaq Trading
Nasdaq OMX was forced to halt trading in all stocks listed on the Nasdaq Stock Market (Tape C stocks), as well as options traded on its Nasdaq Options Market and its BX and PHLX markets (the former Boston and Philadelphia stock exchanges, respectively) just after midday Thursday, Aug. 22, after experiencing undisclosed problems affecting the exchange's ability to distribute market data to the SIP (securities information processor) for the UTP consolidated datafeed.
Nasdaq advised trading participants to cancel orders, after confirming that no UQDF (UTP Quote Data Feed) channels were able to disseminate data from the exchange, and to route open orders on its options markets away to other exchanges.
In addition, derivatives exchanges trading options on underlying Nasdaq-listed securities -- including the Chicago Board Options Exchange and its C2 market, as well as MIAX Options Exchange -- halted trading in those underlyings, while other equities markets also suspended trading in Nasdaq-listed securities, rather than continuing to trade without underlying source data to create prices.
"If there are issues with the SIP, which many traders depend on, it wouldn't make sense for us to continue trading in those securities," says a spokesperson for BATS Exchange.
Just before 1pm, Nasdaq announced that any trading resumption would begin with a halt cross and five-minute quote-only period, and would clear all stale quotes but not automatically cancel open orders. However, the exchange did not give any indication of when trading would resume.
UPDATE: Trading resumed at 3:25pm, following a halt cross and five-minute quote-only period, after which the exchange reported that all systems were operating normally and options markets followed suit. Nasdaq cleared all stale quotes prior to the resumption of trading, but upheld open orders that had not been cancelled beforehand by traders.
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