More details on exactly what caused Tuesday’s NYSE trading glitch

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A trader works on the floor of the New York Stock Exchange.

Peter Kramer | CNBC

NYSE President Lynn Martin and others exchange officials confirmed to CNBC that a manual error involving the Exchange’s Disaster Recovery configuration was the primary cause of the Big Board’s trading glitch at Tuesday’s opening.

After the 9/11 disaster, the NYSE was tasked with maintaining a primary trading site (at the NYSE) and a backup site (which is in Chicago).

On Monday night, the Chicago backup site software was undergoing routine maintenance.

On Tuesday morning, there was an error that the backup system (Chicago) was still running when the main system (NYSE) came online.

Because the backup was still running, when the main site started some stocks behaved as if trading had already started.

As a result, Designated Market Makers (DMMs) who would normally publish an opening auction print for each stock were prevented from doing so as the system acted as if an opening had occurred as -yes. This led to large price swings and trading halts.

Martin said the NYSE was looking at implementing stronger testing protocols.

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