Jul, 2001 : Nasdaq Introduces New System, But Traders are Wary
📅 - The Nasdaq Stock Market (nasdaq.com) debuted its new stock-trading engine this week, but has come under fire by some traders because of glitches in the technology and recent outages.
The new system, named SuperSOES, was launched on Monday, replacing SOES (Small Order Execution System). Although it initially handled only 18 stocks, Nasdaq intends to implement the new system completely by July 30. Designed to handle up to 999,999 shares at a time, it is able to keep up with larger and faster trades than the old system, which could only handle 1,000 at a time.
The launch of SuperSOES, more than one year late, is part of the Nasdaq's future plans toward unveiling SuperMontage in 2002, an even more powerful trading engine. Eventually the Nasdaq hopes to become publicly traded, and these latest efforts are attempts to showcase its technology.
However, two weeks ago, the Nasdaq's order-processing network, which is run by WorldCom, went down, resulting in suspended trading that lasted just over eleven hours. To compensate for the lost time, the Nasdaq decided to extend trading hours until 2 p.m., although some customers were not able to stay open for the extra hour.
This outage came one day after the Nasdaq ran into trouble enter price quotes for Microsoft after a trading halt, as well as a recent outage in the New York Stock Exchange. Other stock exchanges have been under strain due to increased volume.
Problems such as these have lead to some skepticism about the new system. "Technology hasn't been their strong suit," Damon Kovelsky, an analyst at Meridien Research, told CNET news.
However, representatives from the Nasdaq have deemed the June 29 outage a unique, highly unlikely occurrence, ensuring that the new system will be faster and able to handle more volume in the future.
While the exchange historically has boasted a 99.99 percent uptime, some traders are still wary about using the new system in its initial stages. "Friday is still on the back of people's minds," Kovelsky said. "That was a horrible event for the Nasdaq."
The new system, named SuperSOES, was launched on Monday, replacing SOES (Small Order Execution System). Although it initially handled only 18 stocks, Nasdaq intends to implement the new system completely by July 30. Designed to handle up to 999,999 shares at a time, it is able to keep up with larger and faster trades than the old system, which could only handle 1,000 at a time.
The launch of SuperSOES, more than one year late, is part of the Nasdaq's future plans toward unveiling SuperMontage in 2002, an even more powerful trading engine. Eventually the Nasdaq hopes to become publicly traded, and these latest efforts are attempts to showcase its technology.
However, two weeks ago, the Nasdaq's order-processing network, which is run by WorldCom, went down, resulting in suspended trading that lasted just over eleven hours. To compensate for the lost time, the Nasdaq decided to extend trading hours until 2 p.m., although some customers were not able to stay open for the extra hour.
This outage came one day after the Nasdaq ran into trouble enter price quotes for Microsoft after a trading halt, as well as a recent outage in the New York Stock Exchange. Other stock exchanges have been under strain due to increased volume.
Problems such as these have lead to some skepticism about the new system. "Technology hasn't been their strong suit," Damon Kovelsky, an analyst at Meridien Research, told CNET news.
However, representatives from the Nasdaq have deemed the June 29 outage a unique, highly unlikely occurrence, ensuring that the new system will be faster and able to handle more volume in the future.
While the exchange historically has boasted a 99.99 percent uptime, some traders are still wary about using the new system in its initial stages. "Friday is still on the back of people's minds," Kovelsky said. "That was a horrible event for the Nasdaq."
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