Against the widespread speculation of a malicious cyber-attack, the New York Stock Exchange released a statement about an hour after the complete halt of trading a few weeks ago, stating that the glitch resulted from an “internal technical issue.” The Exchange had suspended all transactions from approximately 11:30 am EST to 3:13 am EST. An update on NYSE’s website lastates that a software release ahead of an industry test that weekend was to blame for the widespread crash. According to the briefing, “the update to the gateways caused additional communication issues between the gateways and trading units, which began to manifest themselves mid-morning. At 11:09am, NYSE issued a Market Status message that a technical issue was being investigated. At 11:32am, because NYSE and NYSE MKT were actively trading but customers were still reporting unusual system behavior, the decision was made to suspend trading on NYSE and NYSE MKT.” (Read the full release here: https://www.nyse.com/market-status/history). This technical hiccup is reminiscent of NASDAQ’s 2013 market failure and Knight Capital Group’s errant trading in 2012 that lead to $440 million in losses. Software bugs lie at the root of the problem for all three instances.
The effects and magnitude of this bad software update reiterate the importance of meticulous software testing. A small, skilled QA team could have easily prevented or dramatically reduced the extent of Wednesday’s freeze. Software testing plays an essential role in an output’s effective performance. Granted, with the immense reach of the New York Stock Exchange, not every defective case can be sought out and corrected before going live, but the vast, unfortunate results of last Wednesday morning underscore, once again, the importance of the human element in software testing. The agile development method integrates testing throughout the project lifecycle, testing early and often, effectively catching bugs at their early stages before they blow up out of proportion at later stages, such as closing down entire stock exchanges. In an email to Business Insider, software expert Lev Lesokhin of CAST said “exchanges such as NYSE need to implement a level of structural quality oversight that, unfortunately, none of them have yet deployed.” The new software rollout was intended to cut costs and facilitate the stock trading process, but instead caused more costly confusion― the S&P fell 1.7% after the market reopened and the day ended. Sure, only one exchange of eleven in the United Stated went down and the overall trade volume last Wednesday seemed consistent with the daily transactions earlier in the week, but a quality, stable product given to the customers gains their confidence. And in the face of China’s current shaky market situation and Greece’s neck-high debt crisis, the NYSE’s ill-timed lack-of-testing mishap drew more alarmed responses than ultimately necessary.
Rachel Zhu currently interns at QASymphony and she is so excited to be part of the team! When she’s not helping with the company’s next big project, she enjoys playing flute, hanging with friends, and playing tennis. Contact her at email@example.com