UPDATE 2-NYSE Amex Options reviewing large number trades
NEW YORK, Aug 20 (Reuters) - NYSE Amex Options is reviewing a large number of erroneous trades that took place this morning in stocks beginning with H, I, J, K, and L between 9:30 a.m. EDT (1330 GMT) and 9:47 a.m. EDT (1347 GMT), NYSE Euronext said.
The exchange operator said while it is still reviewing the issue, it anticipates that most of the impacted trades will be cancelled.
Other options exchanges also said they are reviewing options trades that took place early on Tuesday.
"Any time that an exchange decides to cancel trades, people are at risk," said Larry Weiss, head of U.S. execution trading at Instinet in New York.
He said the problem for traders is that the positions they thought they obtained and may be using to hedge another trade may not exist.
The incident is another is a series of issues related to the exchanges. A year ago, a software problem at Knight Capital Group led to millions of unintentional orders flooding into the market over a 45-minute period.
Nasdaq OMX Group Inc said trades on Nasdaq Options and Nasdaq OMX BX Options between 9:30 a.m. EDT and 9:47 a.m. EDT are under review, while CBOE Holdings Inc said it is reviewing all trades on the Chicago Board Options Exchange and its C2 electronic venue from 8:30 a.m. CDT to 8:41 a.m. CDT.
A NYSE Euronext spokesman declined to comment beyond the statement. A CBOE spokeswoman said it has been operating with no interruptions.
Calls to Nasdaq for comment were not immediately returned.
Earlier on Tuesday, Nasdaq declared and later revoked "self help" against NYSE Amex, which means it asked its clients to bypass that exchange due to an undisclosed system anomaly. It is unclear if the issue is related to the options trades review.
"It appears that the trading issue has involved stocks such as Kellogg, Johnson and Johnson and JPMorgan Chase and Co where options volumes rose to above normal levels this morning," said WhatsTrading.com options strategist Frederic Ruffy.