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It is really pathetic that something as serious as this has yet to be fixed!
fcul44@xxxxxxxx
CBOT Says MCI WorldCom Glitch Idles Trading Network (Update1)
Bloomberg News
August 10, 1999, 8:30 a.m. PT CBOT Says MCI WorldCom Glitch Idles Trading
Network (Update1)
(Adds details about Project A in 2nd-8th paragraphs, add CBOT's trading
volumes in 10th-11th paragraphs and an analyst comment in 14th paragraph.)
Chicago, Aug. 10 (Bloomberg) -- The Chicago Board of Trade said much of its
electronic trading system has been crippled since last week by a
``catastrophic'' outage of a switching system operated by MCI WorldCom Inc.
The CBOT, the largest U.S. derivatives exchange, said the Project A system
has been unavailable to customers outside its Chicago headquarters since
late Thursday. Trading volume on Project A represents about 5 percent of the
exchange's total. ``We have been told the problem has been traced to an
outage at a major MCI WorldCom switching center, which has caused several
network data feeders in the U.S. and abroad to become inoperative,'' CBOT
President Thomas R. Donovan said in a letter
to exchange members today.
The problem hasn't affected the exchange's auction-style trading pits, where
traders buy and sell futures contracts face to face. The CBOT said its
local-area computer network is functioning properly.
The exchange declined to comment on any losses caused by the system failure.
Project A allows members to trade futures contracts linked to U.S.
Treasuries, the Dow Jones Industrial Average, grains and other commodities.
The CBOT said it will notify members today about possible plans to provide
access to more trading terminals on the floor of the Chicago exchange.
``We use regular phone lines but MCI Worldcom provides a dedicated data line
that ensures Project A terminals around the world can communicate with one
another and with our system,'' said Bret Gallaway, a spokesman at the CBOT.
``When the problem developed, we couldn't link all the Project A terminals
into our system,'' and it had to be shut down, he said.
Real Losses
``The real loss is in the trading opportunities for our members and
customers because people couldn't check prices over the weekend and couldn't
gauge cash market prices,'' said Gallaway.
Last year, about 12 million contracts were traded on the CBOT's Project A
system, up from about 6 million in 1997 and 3 million in 1996, the exchange
said.
During July, the average daily volume on Project A was 45,000 contracts,
including all agricultural and financial futures. Trading on the exchange in
July totaled 21.43 million contracts.
MCI Assurances
MCI WorldCom said yesterday that it has had problems since Friday with its
frame-relay network that provides data and Internet services to businesses.
Less than 15 percent of the network is affected, primarily in the Northeast
and Chicago.
The company was not immediately available today for comment on the CBOT's
electronic trading problem.
``If a customer's service is disrupted, they're going to be upset. They will
look for remedy or alternatives,'' said Brian Adamik, an analyst at market
researcher Yankee Group based in Boston. ``The key growth engines for MCI
Worldcom is data. It's important that their data network be flawless.''
As recently as last week, MCI WorldCom assured the CBOT that there would be
no disruptions to service and that the quality of service provided for the
Project A system would improve, according to the letter from Donovan.
``We have now established a contingency plan and are working on ways to
redress this problem,'' Gallaway said.
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