A group of traders working in one the busiest options pits at the Chicago Mercantile Exchange walked out in protest what they called unfair handling of a large trade.
The trade, which was cleared in the CME's Eurodollar Options market, was processed electronically instead of through so-called open outcry in the pit.
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The traders demanded the trade be voided because they said it did not result in the best price for the buyer. The CME Group (NYSE:CME) chose not to invalidate the transaction.
“The block trade in question was managed by longstanding rules and processes of our exchanges,” CME said in a statement to FOX Business. “It was a legitimate, well-managed trade, which was executed within one tick of the market and in one trade.”
By mid-morning, many traders had returned to the pit and the CME says even at its height “a number of market makers (were) continuing to make markets in Eurodollar Options."
Still, market veterans say the dispute brings to light ongoing tension on the floor between open outcry traders that conduct business much the same as they have for decades in the pits at the CME and electronic trading which has overtaken many markets. Most futures trades are handled on what traders refer to as "the screen" now. But options often require more complex transactions and computer programs have not been developed to meet those needs.