Sept. 14 (Bloomberg) -- CME Group Inc., the world’s largest futures market, said it will treat inadvertently placed energy and metals trades yesterday as ‘phantom orders,’ though none of the transactions were canceled.
Over a six-minute period, test orders were “inadvertently” placed on the Globex electronic trading system into active energy and metals markets, the Chicago-based company said today in a statement. CME owns the New York Mercantile Exchange, where crude oil, natural gas, heating oil, gasoline, platinum and palladium trade, and the Commodity Exchange in New York, where gold, silver and copper change hands.
“No trades were busted,” CME spokesman Michael Shore said in a telephone interview. He didn’t have further information yet on which energy and metals markets were affected or if the bad trades moved prices.
“As soon as we became aware of the issue, we began working with affected customers and implemented other corrective steps,” CME said in the statement. The U.S. Commodity Futures Trading Commission was also notified, the company said. CME will “address these transactions in accordance with its Rule 587,” according to the statement.
That rule governs “phantom trades,” which the exchange defines as transactions caused in error that aren’t authorized or that were made with altered terms such as contract month or price. If CME detects such trades its powers allow “including without limitation, closing the market, deleting bids and offers, and/or suspending new bids and offers,” according to Rule 587.