Eurex Futures Exchange Halts Trading on Technical Glitch

A technical glitch halted trading on Eurex, Europe’s largest derivatives market, for about 60 minutes, adding to this month’s tally of exchange breakdowns following a three-hour shutdown of the Nasdaq Stock Market.

The bourse first said it was investigating “technical issues” in a post on its website at 8.30 a.m. Frankfurt time today, with data compiled by Bloomberg showing no prices for futures on the benchmark Euro Stoxx 50 Index and Germany’s DAX Index from about 8:15 a.m. Trading resumed at 9:20 a.m., Frankfurt-based Eurex said in a separate statement.

“It added to the concern about electronic markets you’ve seen recently,” Christoph Hock, an equity sales trader at Alpha Wertpapierhandels GmbH in Frankfurt, said by phone today. “It wasn’t really a catastrophe because the U.K. is closed for a bank holiday and volumes are relatively thin compared to a normal Monday. But it adds to the recent problems.”

The volume of shares changing hands in Euro Stoxx 50 companies was 24 percent less than the 30-day average, data compiled by Bloomberg show.

The glitch comes after a three-hour shutdown of Nasdaq OMX Group Inc.’s U.S. markets on Aug. 22 and a software error on Aug. 20 that caused Goldman Sachs Group Inc. to send unintentional options orders. The disruption prompted the Securities and Exchange Commission to push for rules requiring executives to improve the reliability of their technology.

Israel, China

Yesterday, an errant trade on the Tel Aviv Stock Exchange briefly wiped out almost the entire value of Israel Corp., the holding company controlled by billionaire Idan Ofer. In China, on Aug. 16, a trading error at Everbright Securities Co. spurred a 53 percent surge in volumes and a swing of more than 6 percent in the Shanghai Composite Index.

The Tel Aviv bourse canceled transactions in Israel Corp. shares after the stock plunged 99 percent to 2.1 shekels before rebounding to 1,550 shekels. A trader at a bank made a mistake typing an order and asked the exchange to annul the trade once he realized, a spokeswoman at the Tel Aviv stock exchange said. The trader was fined 10,000 shekels ($2,800), said the spokeswoman, who asked not to be named.

“We’ve had the hiccups and fat fingers in Nasdaq, China, Israel,” Hock said. “You have more and more trading errors and problems at exchanges. If exchanges don’t do it, regulators will at some point come in with better circuit breakers.”

New System

Eurex, a unit of Deutsche Boerse AG (DB1), dominates trading of interest-rate derivatives and lists futures contracts based on the German bund. The exchange moved to a new trading system last year and last week said it planned to enter the foreign-exchange market for the first time, seeking to expand into an asset class dominated by Chicago-based CME Group Inc.

In November 2009, a breakdown forced Eurex to halt trading for more than 90 minutes. A glitch at NYSE Euronext (NYX)’s Liffe derivatives exchange in October last year interrupted transactions in some equity and commodities derivatives. A “connectivity issue” lasting more than six hours stopped trading on Spain’s MEFF futures market in November.

Deutsche Boerse shares fell less than 0.1 percent to 53.63 euros at 1:37 p.m. in Frankfurt.

To contact the reporters on this story: Nandini Sukumar in London at nsukumar@bloomberg.net; Alexis Xydias in London at axydias@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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