CBOE Futures Halted Earlier Today in Third Delay of WeekMatthew Leising
The CBOE Futures Exchange shut down for 90 minutes earlier today, the third hitch the market has suffered this week as it handled record volume in contracts that allow investors to bet on stock volatility.
The exchange, owned by CBOE Holdings Inc., halted trading at 5:45 a.m. Chicago time today due to a system error, and re-opened at 7:15 a.m., according to the company’s website. The home of futures on the Chicago Board Options Exchange Volatility Index, or VIX, also had to delay opening twice this week, on Oct. 15 and 16, as record volume was recorded on each of the days prior to the postponed trading starts.
Delays at CFE, as the market is known, are among the few signs of market structure stress this week as investors worldwide sent stocks plunging, bonds yields rallying and futures volume soaring on concern that a global slowdown would leave central banks unable to boost growth. Markets have calmed after the European Central Bank said today it will increase stimulus efforts and on improved corporate earnings.
Gail Osten, a CFE spokeswoman, wasn’t immediately available to comment.
The market is the only place where traders can buy or sell futures on the VIX, a widely followed benchmark tracking price swings in the U.S. stock market. On Oct. 14, 616,906 VIX futures contracts traded while the next day 791,638 changed hands, the most in the market’s history. That compares with the previous record of 528,628 trades on Aug. 1, according to CFE.
Earlier this month, the CFE shut for about 19 minutes due to a technical malfunction.