In the midst of one of the most stressful days in the history of finance, servers designed to process trading data handled the pressure just fine.
Both the New York Stock Exchange (NYSE) and the Nasdaq exchange reported that their servers bore the strain of well over a billion shares traded on Monday, when Nasdaq dropped 115.83 points and the Dow Jones Industrial Average plunged 554.26 points.
The NYSE has used the servers since 1981 to bring orders into the system, match buy and sell orders in real time, and provide posting information back to the trader.
The Tandem servers handle the order execution and trade reporting systems for Nasdaq, as well as the trade confirmation system.
According to Norm Goldberg, vice president of financial services for Tandem, the machines ran "just as advertised" on one of the heaviest days of trading in history. Nasdaq traded over 1.4 billion shares and the NYSE processed 1.2 billion shares traded.
"The trades were kept running up to date. It was much different from 1987," when the servers could not handle the peak in trading, after the market crashed, Goldberg said.
The only major glitch during the day happened because of shortsighted programming at Nasdaq. The so-called confirmation computers were instructed to allow only one million trades per day. As the number of shares traded creeped upwards of 900,000, programmers took down the system to reconfigure it.
Nasdaq spokesman Michael Whitehouse pointed out that no transactions were lost during the time it took to reconfigure, and confirmations were sent out shortly after the system was back up. The confirmation computers are now programmed to handle five million trades per day.
Nasdaq previously traded an average of "somewhere around 780,000 trades per day," said Bill Wlcek, vice president of computer operations for Nasdaq's Trumbell, Connecticut, facility.
"It was not supposed to go over a billion a shares in 1997," said Wlcek.