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Lights go out on Liffe's late session

John Eisenhammer Financial Editor
Saturday 27 January 1996 00:02 GMT
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Financial Editor

Liffe, London's go-go derivatives exchange, has torn a large leaf out of the Stock Exchange's collected works of cock-ups, admitting the hasty shut-down of its new electronic options trading system just 15 minutes after its launch.

There were shades of Taurus minor yesterday, as pained Liffe officials, more used to rebutting malicious market rumours of coke in the rest-rooms, sought to explain why the plug had hastily to be pulled on Thursday on their "very leading edge system".

Traders across the City had been looking forward to the chance to turn a few quid in this first extension into electronic after-hours options trading.

Suddenly they found themselves tapping in the dark, after having grappled confusingly with reference prices that had taken on minds of their own.

"The system was overloaded and not performing acceptably," said a Liffe spokeswoman, who sounded in danger of crashing herself. "We need to do some more development. Options trading can be very complex."

The APT Plus system was developed in-house at a cost of pounds 2m to enable trading in Bund options to carry on electronically after the close at 16.30 of the normal day's trading, which is conducted by open outcry on the exchange floor by about 2,500 traders.

Liffe has a daily turnover volume in excess of pounds 125bn, and is the biggest futures and options exchange outside Chicago. It is currently linking up with the big US exchange to extend the distribution of its derivative products.

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