Complex Technology Created Vulnerabilities: CBOE CEO
The Chicago Board of Options Exchange is "fine," its CEO said Friday, a day after trading was knocked out for more than three hours, angering market participants as they scrambled to adjust.
The day after the glitch, which the CBOE called "an internal systems issue," the exchange's chairman and CEO, William Brodsky, spoke to CNBC's "Squawk on the Street" about what happened.
"We had the first significant system outage in over 12 years," Brodsky said. "It was unfortunate; we regret it, but quite frankly we're up fine today. It wasn't any sort of hacking incident. These things do happen with any technology company, and yesterday we had one."
Technology is a double-edged sword, Brodsky said. "On one hand, it gives people much more transparency, speed and accuracy. ... On the other hand, the sophistication and the complexity of the technology means that there are vulnerabilities.
"Every system is going to have vulnerabilities, and our job is to make sure that we learn from our experiences and make these incidents very few and far between," he added.
Brodsky dismissed reports that the outage was brought on by a software upgrade, characterizing it as "something that cropped up unexpectedly." Although CBOE technicians were able to isolate the problem, it took longer than anticipated, he said.
(Read More: CBOE Reopens Options Trading After Systems Outage)
"Various aspects" of the options market made it more difficult to reopen the CBOE after the glitch, Brodsky said, as the different types of orders had to be purged and re-entered before allowing trades to operate normally.
"We're going to do a thorough review," he said. "If this were to happen again, we would approach it differently."
Brodsky said he doesn't expect any legal issues, despite traders' inability to execute orders for most of the day. That can disrupt trading strategies such as hedging, and many had to find alternative trades to cover positions.