Stock Exchange Outage Leads to Questions about Backup, Recovery

November 06, 2014

By Laura Stotler - Power Protection Contributing Editor

Surprisingly (and expensively), even the New York Stock Exchange (NYSE) is subject to outages and glitches. That was certainly the case recently when its electronic data feed went down for the count. The NYSE reported an ongoing issue on Thursday, Oct. 30, which lasted approximately 10 minutes and wreaked all sorts of havoc for electronic traders.

Some traders complained that the blip was worse than the blackout of 2013, which halted trading on NASDAQ-listed stocks for three hours. That outage was the result of some sort of glitch between Arca, the NYSE’s electronic market and NASDAQ’s Securities Information Processor (News - Alert) (SIP). Last week’s outage was also reportedly related to a SIP malfunction, which caused a plethora of trades based on “stale” data. That left traders scrambling to correct their errors in the wake of the outage.

According to some sources, the point of failure was an issue at the NYSE data center in Mahwah, NJ. The exchange shifted operations to its disaster recovery site in Chicago after the outage, but the damage was already done. What that issue was, and whether proper UPS backup could have prevented it, remains to be seen.

Eric Hunsader, of research firm Nanex LLC, said that more than 15,000 E-mini S&Ps were sold within a second at stale prices. He accused the NYSE of not taking proper precautions after the 2013 outage. “It looks like they had a complete outage,” said Hunsader. “They’ve done nothing since the blackout when we had the opportunity.”

“The price of having a SIP failure is that everybody trading electronically has to scramble a bit and fix the damage that bad prices have done,” added Jamie Selway, head of ITG, an electronic brokerage firm. He said his firm was forced to shut down trading in its dark pool for about 15 minutes, and then spent the afternoon fixing erroneous trades.

If a 10-minute hiccup can lead to such widespread damage for the NYSE, just imagine the impact an outage can have on your organization. It begs the question: why take that kind of risk when there are solutions available that can prevent outages and the related fallout they incur? Uninterruptible Power Supplies (UPS) offer security and protection for all types of power issues, no matter what the location or scale of the system. With a proper system of battery backup solutions in place, an organization may feel secure that systems will function normally in the event of an outage.

If nothing else, this outage should have enterprises and data centers alike scrambling to ensure their backup and disaster recovery systems, including UPS solutions, are working to full capacity.