CBOE To Investigate Trading Glitches

By Mani
Updated on

The Chicago Board of Options Exchange (CBOE) is to investigate trading glitches at its options and stock exchanges that led to some trading halt.

CBOE To Investigate Trading Glitches

CBOE posted an alert to traders

According to Financial Times, CBOE Holdings, Inc (NASDAQ:CBOE) has posted an alert to traders informing that the exchange was experiencing quote dissemination issues.

The C2 options market impacted last week is one of CBOE Holdings, Inc (NASDAQ:CBOE)’s smaller exchanges.

After the technical glitch was reported at CBOE Holdings, Inc (NASDAQ:CBOE), its rival exchanges NASDAQ and BATS Global Markets, Inc. Class A Common Stock (BATS:BATS) have declared self-help against the CBOE that would imply they are not routing trades to the exchange.

Recent glitches at NASDAQ

Recently NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) also experienced huge technology problems, with the most recent problem resulting in a halt to trading on the exchange. The fault was traced to an important information feed. The fault meant that the company was unable to deliver real time stock prices. That meant the company had to shut down the exchange until it could resume delivery information.

The recent outage at NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) was reportedly begun with some sort of ‘connectivity’ issue with NYSE Arca. The exchange is operated by NYSE Euronext (NYSE:NYX). Their sources said that connectivity problem triggered other problems which resulted in the halting of all trades of NASDAQ-listed stocks for three hours last month. Later reports suggested that the exchange was having trouble just printing to the tape.

If companies and traders lose faith in the ability of the NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) to take orders and deliver proper pricing, there is less of a chance that companies will want to list on the exchange. That means its fees will have to come down if it wants to keep clients.

SEC discusses exchange glitches

Sensing the enormity of the problem, last week the U.S. Securities and Exchange Commission held a meeting with the heads of exchanges.

Arash Massoudi and Gina Chon of Financial Times report the SEC has called on leading stock and option exchanges to identify specific steps taken to improve the structural foundation of the U.S. market. The SEC also asked the heads of exchange groups including NYSE Euronext (NYSE:NYX) and NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) to provide assessment on the robustness and resilience of U.S. market infrastructure.

Goldman Sachs also suffered computer glitch

The NASDAQ glitch came days after Goldman Sachs Group Inc (NYSE:GS) suffered an embarrassing computer glitch that saw its systems inadvertently accumulate thousands of options contracts in minutes. This has put the exchanges in the tricky situation of having to determine which trades to cancel.

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