Technical Glitches Disrupt Chicago Board of Trade Electronic Trading System

Strategic Insights -

The Chicago Board of Trade (CBOT) was forced to suspend its electronic trading system, known as Project A, due to ongoing glitches with an MCI WorldCom communications system. The system, which handles 1 million contracts a month, or about 5 percent of the exchange's total, was idled for parts of seven of the past eight days. Meanwhile, the exchange's auction-style trading pits remained open.

The disruptions have resulted in significant losses for the CBOT, with vice president Michael McGlone stating that "we're losing business - lots of business." The exchange is considering legal action against MCI WorldCom for its failure to deliver reliable services. Despite efforts to resolve the issue, technical teams from Lucent Technologies and MCI WorldCom are still working to fix the problem.

Key Takeaways:

  • The CBOT's electronic trading system, Project A, was suspended due to ongoing glitches with an MCI WorldCom communications system.
  • The system handles 1 million contracts a month, or about 5 percent of the exchange's total.
  • The disruptions have resulted in significant losses for the CBOT, with vice president Michael McGlone stating that "we're losing business - lots of business."
  • The exchange is considering legal action against MCI WorldCom for its failure to deliver reliable services.
  • Technical teams from Lucent Technologies and MCI WorldCom are still working to resolve the issue with the Lucent software.
  • The CBOT has been forced to use a backup plan to facilitate trading.
  • The exchange's auction-style trading pits remained open during the disruptions.

Statistics:

  • 1 million contracts per month are handled by the CBOT's electronic trading system, Project A.
  • 5 percent of the exchange's total business is facilitated by Project A.
  • 7 out of the past 8 days, the system had been idled due to technical issues.
  • Over 100,000 customers were affected by a power outage during July's heat wave.

Sources:

  • Mark Pittman, Bloomberg News
  • The Chicago Board of Trade
  • MCI WorldCom
  • Lucent Technologies
  • IBJ Lanston Futures
  • Commonwealth Edison