CHICAGO, OCT. 19 -- At least 24 memberships on two Chicago commodity exchanges were sold today as the markets reeled under a blizzard of customer orders and floor traders scrambled to cover steep losses.
Bargain hunters took advantage of depressed exchange seat prices as some traders apparently auctioned their seats in a hurry to cover losses suffered in last week's hectic markets.
Commodity traders in stock-index futures appeared to be hardest hit. Trading volume also continued to be heavy in foreign currencies and government securities futures.
Exchange and brokerage officials were said to be closely monitoring trading by customers and members to avoid potential defaults.
"We had some pretty big margin calls this morning," said the head of one Chicago Board of Trade clearing firm.
Meanwhile, exchanges coped with often costly trading errors, which occur when harried floor traders make mistakes in the din of pits and trades don't match up.
With today's market spiral, the problem continued. The Chicago Mercantile Exchange called an unprecedented middle-of-the-night session -- from midnight to 3 a.m. Tuesday -- for stock-index traders to resolve errors. Traders were told to return at 5 a.m. to clear up remaining problems.
"People will be here all night making computer runs," said a Merc spokesman.
Unless settled, a mountain of unmatched trades could delay a market's opening.
"What happens is that the market moves so fast, people don't agree on prices," said Patrick Blackburn, a senior vice president at Chicago Corp.
There was speculation that at least some commodity traders who sold their seats did so because of losses on their stock portfolios rather than in the futures markets.
Eight seats were sold Monday at the Chicago Mercantile Exchange, where the price for a membership on the Index and Options Market dropped to as low as $115,000 from $145,000, the price last week.
One full Merc seat sold for $425,000, down from $478,000. A seat on the Merc's International Monetary Market dropped to $355,000 from $385,000.
Futures on the Standard & Poor's 500 stock index, which took a beating along with stock prices, are traded on the Merc's Index and Options Market.
Seat prices also fell at the Chicago Board of Trade. At the world's largest futures exchange, five seats were sold. Prices ranged from $375,000 to $452,000, down from $530,000, an exchange spokesman said.
Also at the CBOT, nine Index Debt and Energy Market memberships were sold for $50,000 to $70,000. Those were down from $72,000, the Oct. 8 price of a membership to trade futures on stock and bond indexes at the CBOT.
A small percentage of trades usually wind up as outtrades, or errors. But the number of mistakes skyrocketed as brokers scurried to keep up under an avalanche of orders while prices rode a roller coaster downward.
Officials at the Merc and Chicago Board Options Exchange said most outtrades from Friday were cleared up by this morning without any default by a member firm. The errors, however, cause frustrating delays in confirming orders to customers.
In the Merc's stock-index market, where about 135,000 contracts changed hands Friday, 16 percent of trades involved errors -- more than twice the usual percentage.
By this morning, "that figure was down to 7 percent," a Merc spokesman said.
However, last week's errors were resolved only after hundreds of traders attended special Saturday morning sessions at the CBOE and the Merc to double-check trades. Trade-checkers at some brokerages said they worked until late Saturday afternoon.
The CBOE's heavy volume Friday was largely attributed to the expiration that day of its October options contracts. The exchange routinely holds outtrade sessions each month on the Saturday after expiration, officials said.
But Saturday's session "took longer than usual. There were an inordinate number of outtrades," said Gary Lahey, CBOE vice chairman.
The Merc's Saturday meeting reportedly lasted four hours. The only other time the Merc called a Saturday outtrade session was after Jan. 23, another very volatile day in the stock market.