US Options Exchange Leaders Close to Reaching Erroneous Trade Rule Agreement

According to The Wall Street Journal, US Options Exchange leaders have stated that they are close to instituting universal rules for erroneous trades.

While they mentioned that there are still a few discrepancies between the 12 U.S. options exchanges, exchange leaders stated at the Futures Industry Association’s Futures & Options Expo that they were confident in coming to an agreement as early as next week.

The erroneous trade agreement is coming together rather smoothly, as it was only back in September when the Securities Exchange Commission’s Mary Jo White expressed the need to build confidence within the markets and ensure participants that they can operate under many different scenarios.

SEC Commissioner White’s concern springs from a string of erroneous trades by Goldman Sachs back in August. The firm accidently issued a large number of stock-options to be traded at well below the appropriate market value. The differing rules left many traders unsure of what would happen to the trade and resulted in various solutions.

The new rule will alter the operations of the options market to be more like the stock market, where “obvious” trading errors are already handled under a single blanket set of rules.