In a memo to members posted on its Website Monday, William Brodsky, chairman and CEO of the CBOE, admits that the Exchange opened the market as normal Thursday morning, even though it was aware of a technical bug that had arisen during the firm's preparations for extending trading hours on the CBOE Futures Exchange.

"Early Thursday morning our team identified and addressed a potential software issue and subsequently believed we were on track for a normal open," Brodsky writes. "Unfortunately, the nature of a software bug is sometimes only identifiable once the system is operationally ready, such was the case last Thursday at CBOE. As we approached the open, it became apparent that the software issue was not fully resolved, and the decision was made to delay the opening."

He defended the decision not to move to a back up system as soon as the problems arose, arguing that "we believe we provided the most effective solution to the software problem given the information available when the bug surfaced. Much of the delay in the late opening, in fact, was in thoroughly preserving the integrity of the orders we had already received that morning."

While the Exchange re-opened Thursday afternoon, residual problems surfaced at the close of trading Friday when some of Thursday's trade data was erroneously re-transmitted to Options Clearing Council.

Brodsky says the Exchange is now conducting a detailed "post mortem" on its operational response and procedures amidst the disruption.

The incident comes just a month before the US Supreme Court decides whether to hear a legal challenge from the International Securities Exchange over CBOE's exclusive trading rights to options linked to the Standard & Poor's 500 Index and a proprietary Volatility Index trade.