At the Opening: Firms Warn About Volatility, Illiquidity, Delays

Brokerage firms are warning customers about potential volatility and illiquidity when the market opens on Monday. The industry is also concerned that trade reports may be delayed. “Upon its reopening, the equity markets are likely to be very volatile and may experience liquidity gaps,” says a statement on PaineWebber’s website. Like other firms, PaineWebber is warning that orders may not be quickly

Brokerage firms are warning customers about potential volatility and illiquidity when the market opens on Monday. The industry is also concerned that trade reports may be delayed.

“Upon its reopening, the equity markets are likely to be very volatile and may experience liquidity gaps,” says a statement on PaineWebber’s website.

Like other firms, PaineWebber is warning that orders may not be quickly filled, and that execution prices may not be close to the last reported price.

“We strongly urge you to contact your Financial Consultant before placing any orders,” says a statement from Salomon Smith Barney.

Charles Schwab & Co. says it will be limiting some online trading systems in order to ensure maximum functionality.

On Friday, NYSE Chairman and CEO Richard Grasso said broken communication links between firms and the exchange were the main hurdles to restoring full service. Those links were in the process of being tested over the weekend.

Meanwhile, the Securities Industry Association says its understanding is that transactions done last Monday and Tuesday will be cleared and settled in the next three days.

Editor's note: For any comments regarding this article, or to suggest a story idea for RR Online or Registered Representative magazine, contact Editor in Chief Dan Jamieson at [email protected], Online Editor Rick Weinberg at [email protected], Online Managing Editor Cheryl Cooper at [email protected] or Senior Editor Michael Hayes at [email protected]

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