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Nasdaq Trading Freeze – An Extreme Example of the Cost of Disruption

Yesterday’s suspension of trading at Nasdaq, the second largest stock exchange in the US, must go down as one of the most expensive disruptions in history.  The 3-hour suspension led to a fall of nearly 4% in the share price of OMX Group which equates to roughly $200m or over $1m per minute.  The impact was possibly magnified by the awareness of previous technical problems at Nasdaq, most famously the high profile delay to trading in Facebook shares last year.  The problem is not confined to Nasdaq either: the New York Stock Exchange suffered problems in August last year and the London Stock Exchange has to suspend automated trading in both November 2010 and March 2011.