Technology in financial markets remains a double-edged sword – London Business News | Londonlovesbusiness.com

Technology brings new opportunities and advantages to the financial markets, however, issues emerge from time to time. In this regard, financial markets occasionally witness technical glitches.

On Monday, the NYSE faced a technical issue in early trading hours where various stock trading activities were halted briefly.

The exchange informed investors that the problem was related to limit-up and limit-down price bands—a mechanism designed to combat market volatility.

Price bands are set at a percentage level above and below the stock’s average price to prevent rapid price movements from impeding the normal course of the market.

Well-known companies such as Berkshire Hathaway, Barrick Gold, and NuScale were among the stocks affected by the issue. Berkshire appeared to trade at a 99% discount for a brief period. NuScale Power and Barrick Gold both displayed prices down 98%.

While the issue was fixed after the rolling out of a new software release was believed to be behind the glitch, it underscores the critical aspect of technology in financial markets and the importance of a solid understanding of the technological solutions that are put in place. This is particularly the case as faster technological changes become the norm as financial markets move to T+1 settlement and AI takes a larger place in practice.