CBOE may cut VIX futures trading hours after glitches
(Updates with delay to extended trading hours for VIX options)
By Tom Polansek
CHICAGO, Oct 31 (Reuters) - CBOE Holdings Inc may trim trading hours at its futures exchange after suffering glitches that disrupted activity this month, the company's president said on Friday.
The CBOE Futures Exchange experienced problems related to extended market hours for futures on its CBOE Volatility Index, or VIX, as trading volumes spiked, CBOE President Ed Provost said on a call to discuss third-quarter earnings.
The increase in volumes made it difficult for the exchange to complete end-of-day processing for VIX futures during the 15-minute window in which the market is closed, he said.
The problems, which delayed the start of trading, emerged this month as widening concerns about the global economy pressured stocks and propelled futures volume. Trading in VIX futures set consecutive single-day volume records on Oct. 14 and 15.
CBOE this summer extended the trading cycle for VIX futures to nearly 24 hours a day to attract more Asian business. The market closes at 3:15 p.m. CDT (2015 GMT) Monday through Thursday and the next trading day begins at 3:30 p.m. CDT (2030 GMT).
The 15-minute break is short compared to the 45-minute pauses between the end of one trading session and the start of another for other futures contracts, Provost said.
The exchange has made changes to end-of-day processing that should prevent glitches from recurring after busy trading sessions, Provost told analysts on the call. Still, the company may extend the 15-minute break, he added.
More than 9 percent of VIX futures trading takes place during non-U.S. trading hours following the implementation of nearly around-the-clock trading, according to CBOE.
The company is mulling a reduction in hours as it delays the start of extended trading for options on the VIX and the S&P 500 Index, or SPX.
Trading for VIX and SPX options will increase to 13 hours a day from 6 hours and 45 minutes in the first quarter of 2015, rather than by the end of this year as planned, CBOE Chief Executive Ed Tilly said on the call. CBOE needed additional time to complete the regulatory approval process, he said.
CBOE on Friday reported stronger-than-expected third-quarter earnings due to an increase in trading volumes.
(Reporting by Tom Polansek; Editing by James Dalgleish)
