NYSE Equities investigating technical issue regarding LULD bands

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(Reuters) -NYSE Equities said on Monday it was currently investigating a reported technical issue regarding Limit Up-Limit Down bands, sending dozens of stocks listed on the exchange into volatility pauses.

The LULD mechanism is meant to prevent extraordinary market volatility and extreme price movements in individual securities. It prevents trading from occurring outside of specific price bands that are continuously updated throughout the trading day.

The price bands for each security are set at a percentage level above and below the average reference price of the security over the immediately preceding five-minute period.

The exchange operator said additional information would be provided as soon as possible.

“It’s erroneous trade reports and will get taken from the tape,” Joe Saluzzi, co-head of equity trading at Themis Trading, said. “It’s somebody having a glitch whether its the exchange or a market maker.”

Technical issues on exchanges can hit markets, impact traders’ confidence and attract scrutiny from the U.S. securities regulator.

Stocks listed on the NYSE, such as Berkshire Hathaway (NYSE:), Chipotle Mexican Grill (NYSE:) and Barrick Gold (NYSE:), among others, were halted for volatility.

© Reuters. The logo of the New York Stock Exchange (NYSE) is seen on the door in New York, U.S., March 18, 2020. REUTERS/Lucas Jackson

Some stocks showed unusual outsized movements. Berkshire Hathaway and Barrick Gold shares were shown to be down 99.97% and 98.54%, respectively, due to the technical issue.

The NYSE did not immediately respond to a Reuters request for comment.

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