Wednesday 24 October 2018 4:37 pm | Updated: Tuesday 21 May 2019 4:21 pm

Norwegian trader default drags on Nasdaq profits

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Exchanges operator Nasdaq posted a 4.1 per cent third quarter loss as it absorbed an $8m (£6.2m) loss sparked by the collapse of a Norwegian trader.

The New York-headquartered trading exchange, which is the largest conduit for physical energy market futures in the Nordic region, was hit when Einar Aas, a private trader, defaulted after his bet on the spread between German and Norwegian energy markets collapsed.

Its expenses for the quarter rose to $354m, up from $341m for the same period last year. Net revenues were $600 million, down $3 million from $603 million in the prior year period.

Nasdaq expelled Aas from the Nordic market last month. In a statement, power trader Aas said: “My position was too big in relation to the market’s liquidity”, confirming that Nasdaq had sold his portfolio after the default. He said he was at risk of personal bankruptcy.

Queries have been raised over why Aas was permitted to be a direct member of Nasdaq’s Nordic market. Sweden’s financial regulator plans to look into how he racked up huge losses and could act as his own clearer, or trade guarantor.

“The members of course are extremely upset,” Friedman told attendees at a conference earlier this month, according to Bloomberg. Nasdaq told its members that Aas last received a credit check in October 2017.

Adena Friedman, Nasdaq’s president and chief operating officer, said: “Third quarter revenue exhibited solid organic revenue growth across our franchise, in-line with our longer-term outlook. The continued strong growth in market technology, index and analytics, which are areas where we’ve shifted more of our resources, enhances our confidence in our new strategic direction.”