Wall Street

Options trading restored on all exchanges after glitch

John Melloy, Executive Producer, Fast Money
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Trading in options was restored at major exchanges after an earlier glitch halted trading. At least four major U.S. options exchanges reported problems in the early afternoon on Monday.

Options trading was halted on all the major U.S. exchanges at 1:40pm ET because of an apparent quote dissemination problem related to OPRA, a so-called utility for the industry operated by the 11 major exchanges.

Between 12:30 ET and 1:40 ET, inaccurate quotes were being sent to vendors like online brokerages. OPRA stands for the Options Price Reporting Authority and is run jointly by the CBOE, AMEX, ARCA, BATS, BX, BSE, C2, ISE, MIAX, Nasdaq and PHLX.

Nasdaq halts options trading

The NYSE, CBOE, and Nasdaq all said trading had been restored as of 2:35pm ET. Later Monday evening, the NYSE said it was busting some options trades because they were erroneously processed after market close due to the earlier glitches.

The NYSE explained that there was a processing error due to a weekend upgrade at SIAC, which it owns. The cause of the outage was being investigated. SIAC operates OPRA, but the underlying technology is not owned by the NYSE.

"All of a sudden my P&L went to zero and then I noticed that all the options prices went to zero," said Jon Najarian, co-founder of TradeMonster.com. "Then word went out officially at 1:40 that trading was halted. There were probably minutes there that people were looking at quotes that were absolutely wrong."

At 1:57 ET quotes started updating again from most exchanges for major stocks like Apple. The CBOE sent a message alert to traders that the linkage issue to OPRA had been resolved. Other exchanges have sent messages saying that quotes on their exchanges will start operating normally.

The options halt is the second major glitch impacting securities prices in the last month.

U.S. securities regulators said they were monitoring the situation.

--by John Melloy, Executive Producer, Fast Money