There’s a lot of questions to be asked about yesterday’s market sell off. Why did Accenture have a huge volume spike then go to $0.01 bid? Did NYSE cancel all trades between 2:40pm and 3:00pm that had a price delta of 60% like NASDAQ did?
The exchange got back to us and answered the following questions for you:
Q: Why did NYSE listed stocks like ACN and IGM go to 1 cent or near-zero bids?
A: Orders were rerouted to electronic markets.
Q: Were those orders at those prices canceled?
A: See above. No trades canceled.
Q: Why were bids like that allowed to take place on the exchange when the NYSE has Designated Market Makers in place to prevent such a thing?
A: The human element helps. It’s a differentiated market model. Our exchange mechanism functioned properly yesterday. When movements become rapid and electronics can’t handle it, our humans step in. They bring in sellers and buyers means the market can’t value that stock at that time properly.
Q: And lastly, NASDAQ announced trades between 2:40pm and 3:00pm yesterday would be canceled if price delta was 60% or higher. Will NYSE be making a similar announcement or move?
A: NYSE Arca (NYSE’s electronic market) is doing the same thing. NYSE is not.
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