Nasdaq U.S. Options Market Suffers Outage Halting Some Contracts

One of Nasdaq OMX Group Inc. (NDAQ)’s U.S. options markets experienced a technical malfunction that prompted it to briefly stop trading some contracts.

Options with symbols beginning with A through M were halted on the Nasdaq Options Market as of 11:42 a.m. New York time today. Transactions resumed at about noon, according to a statement from the exchange operator.

The outage was caused by Nasdaq’s computers being temporarily unable to process data from the industry’s main pricing feed, known as OPRA, according to a person with direct knowledge of the matter, who asked to not be identified because the details are private.

Representatives from other U.S. options exchanges -- including CBOE Holdings Inc. (CBOE), IntercontinentalExchange Group Inc., International Securities Exchange LLC, and Bats Global Markets Inc. -- said they didn’t experience any issues.

“Nasdaq went down but the other exchanges were there to take orders, so the consequences are limited,” said James Ramelli, an options strategist for Keeneonthemarket.com. “One instance is not a problem, but the fact that glitches continue to happen is making these situations a big deal. It’s a problem for market confidence.”

After a Nasdaq malfunction on Aug. 22 prompted a three-hour trading halt for thousands of U.S. stocks, Securities and Exchange Commission ChairmanMary Jo White demanded the industry collaborate on making systems more resilient. Other exchanges have seen their own malfunctions, and Goldman Sachs Group Inc. roiled options trading on Aug. 20 by bombarding the market with transactions sent in error.

To contact the reporters on this story: Nick Baker in Chicago at nbaker7@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

To contact the editors responsible for this story: Nick Baker at nbaker7@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net

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