Technical Failure Delays Eurex Trading in Futures, OptionsJohn Detrixhe
A technical failure postponed the start of trading in all futures and options contracts on Eurex, Europe’s largest derivatives market.
Trading in derivatives on German bonds and the benchmark DAX Index resumed shortly after 9:20 a.m. Frankfurt time. Deutsche Boerse AG’s Eurex said “technical issues related to the distribution of market data” caused the delay, according to an e-mailed statement.
Exchanges have increased their technology investment to make markets more reliable, according to Rebecca Healey, market structure analyst at Tabb Group LLC in London. The possibility of Greece leaving the euro zone has added to volatility, which tends to stress market infrastructure.
“This is when the robustness of technology becomes self evident,” Healey said. “This is very telling of the level of investment that exchanges now have to make in order to ensure that their systems are robust and can withstand the type of market volatility that we now see.”
The VStoxx Index, which measures volatility on the Euro Stoxx 50 Index, has risen to 24.6 from a low of 12.7 last year. The DAX Volatility Index, or VDAX, has climbed to 19.7 this year from a low of 10.8 in 2014.
‘A Big Deal’
“In a week where Greece is in the headlines, not being able to trade European assets is potentially a very big deal,” said Michael O’Brien, director of global trading at Boston-based mutual-fund company Eaton Vance Corp. “When we’re looking for the most efficient way to implement a trade idea -- considering liquidity, cost of execution -- futures are very often the top of the list.”
Deutsche Boerse last suspended one of its major markets on Oct. 31 when a computer malfunction forced it to halt trading on its Xetra equities platform for 72 minutes.
The German exchange operator’s competitors have also suffered outages in the last few months. Euronext NV’s national benchmark indexes for France, the Netherlands, Belgium and Portugal failed to calculate for more than three hours on Nov. 27 following a technical incident. Two weeks later, an outage stopped trading of futures and other derivatives on those equity indexes at the market open.