Software problem shuts US options exchange

Published on NewsOK Modified: April 25, 2013 at 4:12 pm •  Published: April 25, 2013

NEW YORK (AP) — Trading on the biggest exchange for financial options resumed Thursday following an outage caused by software problems.

The Chicago Board Options Exchange reopened at 12:50 p.m. (1650 GMT) after being closed from the start of the trading day. The shutdown forced traders to scramble for alternatives.

The outage followed a brief scare in financial markets Tuesday afternoon when hackers sent a false Associated Press tweet reporting explosions at the White House. Stocks plunged for two minutes as computerized trading systems unloaded stocks. Regulators are increasingly looking into the safety of computerized trading systems.

Initially, there was speculation that CBOE computers had been hacked, but the exchange said hackers were not involved. It was an internal "software issue" that had delayed the opening, said CBOE spokesperson Gail Osten.

The CBOE is the largest U.S. options exchange. It is the only place to trade two popular options — one a bet on the future price of the Standard and Poor's 500 stock index, the other a kind of insurance against wild stock-price swings.

Options give the holder the right, but not the obligation, to buy and sell stocks or other financial assets in the future.

The exchange normally opens at 9:30 a.m. When it opened at 12:50 p.m., the only trading was in options on the S&P 500, according CBOE's Osten. Trading of other options resumed ten minutes later, she said.

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