Published August 22, 2013
Trading of all Nasdaq-listed securities was halted for three hours Thursday afternoon. During the hiatus and after trading resumed, traders provided some reaction to the halt and growing market complexity.
Jonathan Corpina, Senior Managing Partner at Meridian Equity Partners:
“With all the different things occurring and all the hiccups, it really shows me and shows investors that in the debate of man versus machine, the equation keeps leading toward humans.”
On getting information during halt: “The problem is who do you call? Who do you talk to? The problem gets worse by the lack of information.”
“Every minute that goes by is critical. I think they’re going to do their damndest to get it done today.”
Frederic Dickson, Chief Investment Strategist at D.A. Davidson & Co.:
“From a market perspective, everybody is in a wait and see mode. So far, I don’t see much of a market reaction. There will probably be a gush of some sort at that moment (when Nasdaq reopens).”
“It’s a sleepy, light news day, and a lot of traders are on vacation. If some sort of glitch was going to happen, today is probably a good day for it to happen. Fortunately this doesn’t happen often. Usually when there’s a problem, it tends to spill over (beyond just one exchange).”
“The difficulty is explaining to my clients why there would be an interruption in the middle of the trading day.”
Todd M. Schoenberger, Managing Partner at LandColt Capital LP:
“Are you kidding?! How ironic this all-electronic hiccup occurs just weeks, maybe days, before the ICE/NYSE merger is complete, which we all know will eventually mean an all-electronic big board without human interaction (floor traders).
“We go through this charade every once in a while with the electronic market centers, yet, never hear about ‘issues’ when the humans get involved. I’d rather have a slower trade execution with data integrity than this kind of repeated nonsense.”
On the lack of information: “From a trader’s perspective, everybody on the floor is extremely concerned about the lack of transparency. We’ve heard nothing from the SEC. It’s like everyone is scared to say anything.”
Doreen Mogavero, President and CEO of Mogavero, Lee and Co.:
“System failures of any kind are terrible for investor confidence. Unfortunately we are in an environment where regulators have forced exchanges to become more and more reliant on machines and less reliant on human beings.
“The New York Stock Exchange has the right model. Humans beings and technology. The NYSE management has refused to give up the human element on the floor for just this reason. I think we accept that technology will fail occasionally, that has become a fact of life for all of us. That makes human interaction such as we have on the NYSE all that much more important.”
“Regulators have to begin to realize that the pendulum has swung too far in the direction of machines and they need to re evaluate the way they think of the market. They should follow the model that the NYSE has created.”