Call it the "flash freeze."
Trading of Nasdaq stocks and options on the Nasdaq and New York Stock Exchange was halted due to an unknown trading glitch Thursday.
"This is a very big problem. It's the flash freeze," says Sal Arnuk, trader at Themis Trading.
The problems are connected with the Security Information Processor, a system that collects stock prices used by the public, Arnuk says. "This is a very big issue. The markets are broken."
Traders were relieved that trading volume has been light, as that may reduce the impact ofthe outage. But the danger is how the system will react when all the cancelled orders are released when the system comes back up, Arnuk says. "It's almost unpredictable what will happen in the market," he says.
It's the latest black eye for the stock markets, which has been home of several trading problems. Investors are still vexed by the Flash Crash of May 6, 2010 when the value of the Dow Jones industrial average crashed more than 1,000 points over a period of about 15 minutes.
And it's another embarrassment for Nasdaq, which was widely panned for trading problems and delays with the initial public offering of social networking stock Facebook last year.