CME Group Inc. shares declined 1.8% on Wednesday following a disruption that halted trading on its Globex metals and natural gas futures and options markets. The exchange attributed the suspension to technical issues identified in its monitoring systems.
The operator posted that natural gas futures and options markets would enter a pre-open phase at 12:45 Central Time and would open for trading at 12:50 Central Time. In its customer notices, the exchange said all day orders and good-till-date orders with the current date were canceled. By contrast, good-till-cancelled orders that had been acknowledged by the system remained working.
According to alerts on the exchange's website, the technical problems were first detected around 12:11 Central Time when the Global Command Center identified issues affecting metals and natural gas futures and options trading. The exchange then halted those markets at 12:15 Central Time while its support teams investigated the underlying problems.
CME Group operates one of the world's largest derivatives marketplaces. Its Globex electronic trading platform handles futures and options contracts across a range of asset classes, including metals and energy products, and the platform was the locus of the interruption described in the exchange's notices.
Summary
The exchange's monitoring center detected trading issues on Globex linked to metals and natural gas futures and options beginning around 12:11 Central Time. Trading on those markets was halted at 12:15 Central Time. The exchange provided timed windows for natural gas pre-open and open at 12:45 and 12:50 Central Time respectively, canceled all day and current-date good-till-date orders, and allowed acknowledged good-till-cancelled orders to remain active. The stock reaction on the day following the interruption was a 1.8% decline.
Key points
- CME Group's shares fell 1.8% after a technical issue halted Globex metals and natural gas futures and options markets.
- The exchange set a pre-open for natural gas at 12:45 Central Time and an open at 12:50 Central Time, per its customer alerts.
- Order handling: all day orders and good-till-date orders with the current date were canceled; good-till-cancelled orders that had been acknowledged remained working.
Risks and uncertainties
- Operational risk to electronic futures and options trading platforms - the incident shows potential for service interruptions on Globex affecting metals and energy products.
- Order execution and order book disruptions - cancellations of certain order types could affect participants in the metals and natural gas futures and options markets.
- Timing and resolution uncertainty - while the exchange set pre-open and open times for one market, the alerts indicate investigation was ongoing during the halt, and the full scope of the technical issue was subject to the exchange's support review.
The exchange's alerts and timing notes served as the primary source of information about the incident and the steps taken for market resumption. No further details about the cause of the technical problem were provided in the notices referenced by the exchange.