CME apologises for heating oil orders

28 September 2010

Written by Neil Brunskill

CME Group, the owner of the world's largest futures exchange, has apologised to its clients after it mistakenly listed 30,000 dummy orders for heating oil on the New York Mercantile Exchange.

The technical error, which occurred earlier this month, caused spreads between October-delivery and December-delivery crude futures to widen by 28 per cent in a matter of minutes, according to the Financial Times.

In a letter sent to its clients, CME Group chairman Terry Duffy and company president Phupinder Gill pledged to refund any funds lost as a result of the dummy listing.

"While we maintain procedures designed to ensure that our testing is separate from the production environment and live trading, unfortunately, due to a human error that occurred Monday, these procedures were not followed," the duo said.

The mishap comes at a particularly unfortunate time for the company as federal investigators are scrutinising high-speed trading practices particularly closely after the "flash crash" witnessed on May 6th, when the Dow Jones Industrial average lost 700 points in a number of minutes before rebounding equally rapidly.

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