(Corrects paragraph 7 to remove reference to SPXPM contract on
C2. The contract now trades only on the Chicago Board Options
By Doris Frankel and Tom Polansek
Sept 13 Trading on two of CBOE Holding Inc's
securities exchanges was halted for more than half an hour on
Friday due to unidentified technical problems, becoming the
latest black eye for U.S. exchange-operators who have suffered a
series of outages and malfunctions this year.
CBOE Holdings said it stopped trading for 47
minutes on its C2 electronic Options exchange and for 33 minutes
on the CBOE Stock Exchange. Trading resumed on C2 at 10:50 a.m.
CDT (1550 GMT) and on the CBOE Stock Exchange at 10:35 a.m. CDT,
according to CBOE's system status page on its website.
Earlier, the company suffered problems affecting the routing
of orders, including the dissemination of quotes, on certain
stock option classes on C2. Those issues were resolved by 9:33
a.m. CDT, according to the website.
CBOE, which operates the Chicago Board Options Exchange, the
largest U.S. options market, said it was investigating the
The outage came one day after U.S. stock exchanges agreed
with securities regulators to implement changes in how they
respond to major disruptions such as the Aug. 22 software
failure at Nasdaq that shutdown trading for three hours.
Friday's problem, however, was no where near the magnitude
of the Nasdaq outage last month, which idled roughly a third of
the U.S. stock market.
C2, which offers equity options, has garnered only a small
percentage of total U.S. options volume since its launch in
Because equity options are listed on 11 other venues,
traders can shift their business to other markets, including
C2's sister exchange, the Chicago Board Options Exchange.
So far this year, total option market share at C2 through
August is 1.89 percent, according to OCC, which clears all
listed options. The Chicago Board Options Exchange has 25.36
percent of total market share.
CBOE Stock Exchange market share through August this year is
0.43 percent, trading an average of 26.9 million shares per day,
according to CBOE.
CBOE notified traders at 9:45 a.m. CDT that the Options
Price Reporting Authority (OPRA) was not disseminating market
data from C2. OPRA is a centralized computer system that
disseminates options price quotes and completed trades from the
exchanges and distributes these to market data vendors.
At 10:03 a.m., trading was halted on C2. One minute earlier,
trading was halted on the CBOE Stock Exchange. Trading resumed
on the stock exchange at 10:35 a.m. CDT, according to the system
status website. The exchange began experiencing dissemination
issues starting at 9:41 a.m, CBOE said.
On Thursday, U.S. Securities and Exchange Commission Chair
Mary Jo White met privately in Washington with top executives of
the major exchanges, including CBOE's executive chairman William
Brodsky, and later announced reforms.
Less than a month ago, Goldman Sachs Group flooded
CBOE and other U.S. equity options markets with erroneous trades
because of a technical error. The trades impacted markets and
cost the bank tens of millions of dollars, according to a
In April, a half-day outage at the Chicago Board Options
Exchange exposed software problems that came about as the
exchange prepared to extend trading hours for futures contracts
on the CBOE Volatility Index. CBOE at the time delayed the
expansion of the trading cycle and has said it plans to add
hours in late September.
(Editing by Chizu Nomiyama and Chris Reese)