CHICAGO (MarketWatch) — The start of trading on the Chicago Board Options Exchange has been delayed Thursday due to system problems, freezing investors out of an important corner of the financial markets.
The biggest U.S. options exchange by volume said in system alerts that some of its customers were having problems “downloading” information from CBOE early Thursday.
CBOE initially planned to reopen at 10:15 a.m. EDT and then again at 10:20 a.m., but later delayed trading with no estimate as to when the exchange might get up and running, according to notices sent to traders. A spokeswoman for CBOE had no comment.
The delayed opening affected both floor and electronic trading. It postponed business in options on key market indexes including the CBOE Volatility Index, known as the VIX, and options on the Standard & Poor’s 500-stock index, both of which are traded solely at the Chicago-based exchange.
The outage meant that two critical tools for hedging stock-market risk —options on the S&P and VIX indexes — have been unavailable to banks, institutions and trading firms for much of Thursday morning. The outage forced firms to hunt for alternatives such as options on similar exchange-traded funds, though traders said these generally are imperfect substitutes.
The system problems at CBOE are the latest in a spate of technology outages that have raised questions around the stability of the complex computer networks that underpin business in U.S. financial markets.
An expanded version of this report appears at WSJ.com.
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