The Nasdaq Stock Market plans to cancel more trades from a wider list of stocks, as the focus turned to derivatives and regulators, a day after U.S. markets plunged due to what is thought to be a trading glitch.
Trades that took place during the worst of the Thursday meltdown will be canceled on more than 250 stocks, Nasdaq OMX Group Inc. said, adding to the long list of "busted" transactions on NYSE Euronext's Arca venue and other exchanges.
The unusual market-wide agreement to cancel trades in stocks — which fell more than 60 percent for a 20-minute period Thursday — raised questions about the fallout in futures and options markets, where many contracts are based on underlying stocks and stock indexes.
CME Group Inc. the giant futures market, had no immediate comment on whether it would cancel or adjust trades. Two major futures trading firms said CME had given no notice that trades would be broken.
A source said it is likely options trades based on the equities trades that were canceled would be "adjusted, not busted."
At least one high-frequency trading firm said it stopped trading during the worst of the selloff, raising questions about the reliability of the all-electronic market-makers that provide much liquidity in today's markets.
The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority participated in a conference call with exchanges on Thursday, suggesting the trading meltdown could attract more regulatory attention on Friday.
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