Bob Pisani is off; this post was written by CNBC producer Robert Hum.
A somewhat bizarre sequence of events with Community Health Systems trading today.
Trading in CYH was halted 4 times due to single stock circuit breakers following the news of the Tenet Healthcare suit. That halts a stock for 5 minutes when there is a 10% or more move within a 5-minute period.
But upon a closer look, CYH shares were actually halted for longer than the normal 5 minute period on the NYSE FLOOR during the 4th halt.
CYH shares were halted systemwide at 10:42am at $24.85 – per the normal single stock circuit breaker rules.
5 minutes later, shares resumed trading OFF THE NYSE FLOOR ONLY at 10:47am. First trade was at $24.98, ever so slightly higher than $24.85 – where it was prior to the halt.
Only after another 6 minutes later (or 11 minutes after the stock was initially halted) did trading resume on the NYSE floor. At 10:53am, CYH stock reopened at $27.35 — that’s a significant 9% higher than where the stock opened in over-the-counter trading 6 minutes earlier. That delay would presumably have been good for sellers, but bad for buyers since the price had jumped during that time.
The NYSE price wound up being closer to where the stock has been trading since then (around $27 now) – even though it took 6 minutes longer to re-open the stock. Meanwhile, the over-the-counter markets were much quicker to provide liquidity to traders for a stock seeing very volume in the morning. At midday, CYH has seen 26 million shares changing hands compared to the 1.2 million shares it normally sees for an entire day.
What was the cause of this delay? It is not clear. The NYSE hasn’t provided official comment yet, and floor traders aren’t clear on the situation. Nobody’s ready to point the finger on if it was a technical issue an influx of sell orders causing a large order imbalance that caused the extended delay on the NYSE floor.
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