• 29 Apr 2013 at 6:11 PM

Misplaced Confidence At The CBOE

CBOE Holdings Inc. technology staff knew of software issues in the hours before the largest U.S. options exchange suffered a three-hour outage, according to people briefed on discussions among CBOE officials.

Staffers at the company, which operates the Chicago Board Options Exchange, were confident they could fix the issues, CBOE executives have told colleagues and others outside the company. One area of focus by CBOE Thursday and Friday has been whether the exchange should have moved to a backup system to be safe, the people briefed on the discussions said….

The CBOE suffered a drop in its market share in some contracts Friday. One trader likened the volume drop to the company being sent to the “penalty box.”

Which is totally unfair, since the whole thing isn’t even the exchange’s fault: It’s your fault for wanting better trading systems.

U.S. stock options are one of the world’s most competitive financial markets, with 11 platforms vying for business, and CBOE’s efforts to match improvements introduced by rival exchanges are being examined as a potential cause of Thursday’s problems, according to the people briefed on the matter.

And while things may be back up and running on South LaSalle Street, they’re not exactly running well.

Another error cropped up late Friday when CBOE notified customers that “numerous” trades from Thursday had unexpectedly appeared in CBOE’s system after the market’s close. Exchange officials were working with staff from the OCC, the clearinghouse that processes all U.S. options trading, to remove the trades, according to a notice from CBOE….

Even after the CBOE said it was fully up and running Thursday, trading-firm executives said they had problems getting trade reports back, making it unclear where they stood on some positions.

CBOE Staff Knew of Problems in Advance [WSJ]

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Comments (3)

  1. Posted by Guest | April 29, 2013 at 6:33 PM

    I see we've discovered Ctrl + i

  2. Posted by Hopelessly Denuded | April 29, 2013 at 9:27 PM

    So we can be pretty confident that:
    1. Shazar isn't allowed to touch the keyboard until after 2pm, and
    2. Shazar either is long CBOE puts, or he was rejected by some option-trading shop based in Chicago, or he was brutally rejected by some girl/guy involved in the derivatives biz in Chicago, or both.

  3. Posted by Guest | April 30, 2013 at 9:31 AM

    Misplaced Confidence At The Dealbreaker:

    Staffers at the company, which operate teh Dealbreaker Brand, were confident they could use another contributor to their stellar lineup. DB executives have told colleagues and others outside the company. One area of focus by DB Thursday and Friday has been whether the staff should have moved to a backup location to be safe from CTL+C & CTL+P, the people briefed on the discussions said….

    The DB suffered a drop in its market share of funny and intelligent posts last week. One trader likened the volume drop to the company being sent to the “Shazar box.”