CME outage continues to disrupt global futures trading
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The news: Trading in futures and options on the Chicago Mercantile Exchange (CME) was halted on Friday after a cooling issue affected on of its data centres, disrupting global equity, bond and commodity markets.
The context: The outage at the world’s largest derivatives exchange started late on Thursday in the US, and remained largely unresolved as Wall Street opened the day after the Thanksgiving holiday. CME said that stock futures and options trading would fully open at 8:30am ET (12:30am Saturday AEDT).
A spokesperson for the Texas-headquartered CyrusOne told CNBC the company was actively responding to a cooling system issue at its CHI1 data centre in the Chicago area, which had impacted customers including CME Group.
“On November 27, our CHI1 facility experienced a chiller plant failure affecting multiple cooling units,” CyrusOne told CNBC. “Our engineering teams, along with specialized mechanical contractors, are on-site working to restore full cooling capacity. We have successfully restarted several chillers at limited capacity and have deployed temporary cooling equipment to supplement our permanent systems.”
Bloomberg reported that the disruption created significant challenges equity-derivatives desks, as options on the S&P 500 representing roughly USD600 billion ($919.23 billion) in notional value were set to expire on Friday. Some traders may attempt to use ETFs and Euro Stoxx futures delta-hedge SPX option positions, head of equity derivatives EMEA at Liquidnet, Oliver Deutschmann, told the outlet, but neither provides a clean hedge.
The halt has carried on longer than a similar CME outage in 2019 which triggered widespread frustration as market participants contemplated the prospect of a lost trading session for millions of contracts tracking the S&P 500, Dow Jones Industrial Average and Nasdaq 100.
Bourses operated by CME include the Chicago Board of Trade, the New York Mercantile Exchange and the Commodity Exchange.
