NYSE American Options has halted trading in some options securities after a technical issue, according to a notification from the exchange. The suspension has prompted other exchanges to disregard quotes from the venue.
The exchange is one of 20 options venues in the United States, accounting for about 10% of the more than 70 million contracts of US equity options that trade each day. Its halt therefore affects a meaningful slice of daily activity in the options market.
Other exchanges are now ignoring any quotes from NYSE American Options, according to exchange statements. Options exchanges typically do not allow orders to execute at a worse price than one shown on another exchange, a rule designed to protect investors and keep pricing consistent across venues.
However, that rule can be disregarded in the event of a system malfunction such as this one. The halt underscores how interconnected US options markets are, and how a problem at a single venue can ripple across the wider trading system.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing