Tagged: The Freeze

Follow the Line

“All this is not a product of nature.”

No I’m not referring to the display, as it were, by Miley Cyrus at the Video Music Awards. If the shortest distance between two points is a straight line, what do you call a stock market with 13 exchanges, forty broker-operated alternative systems, 4,300 FINRA-regulated brokers and dealers, 2,000 order types, a complex routing scheme for moving millions of quotes per second and all the associated messaging traffic at light speed (oh yeah, and hopefully some investing too)?

Well, not a straight line. The Wall Street Journal’s Holman Jenkins wrote a compelling opinion last weekend on the Nasdaq data outage Aug 22, which he titled “How to Think About the Nasdaq Freeze,” and from whence I borrowed today’s opening salvo. You should read it.

As you’ve heard – at length on CNBC – the Nasdaq halted trading for three hours last Thursday due to a connectivity issue that led to failure propagating the marketwide data stream providing consolidated quotes in Nasdaq securities.

The WSJ’s Jenkins argues that whatever the root cause of this latest in a long line of troubling market mishaps, “complexity breeds snafus.” The market where your investors compete to demonstrate belief in the story you deliver is a tangled web. (more…)