The traders said the incident in U.S. Treasury bond futures trading on the CBOT's Project A system was a proof that open outcry was more trusty than Screen-based trading.

The open outcry system has been threatened by a planned launch of a new all-electronic exchange next week and the CBOT's own plan to start concurrent electronic trading during regular hours.

"It can happen with any computer system," a floor trader for a commercial firm said.

The incident occurred when one firm apparently placed an order to sell about 1,500 contracts of December US T-bond futures, instead of a buy order, traders said. The erroneous order was blamed for the market's decline toward 126-3/32 from about 126-19/32 around 0530 CDT/1030 GMT.

Traders said the trades that resulted from that order weresubsequently nullified, leaving market-makers' hedge positions in cash treasuries and other instruments hanging dry.

"Some of my buddies, some of the firms that are market-makers...bought 08 (at 128-8/32) on the way down and they immediately sold cash," the commercial firm trader said. "Their trade's busted and now they have a position with only half a leg."

A CBOT spokesman confirmed an input error took place overnight, but declined to specify quantity or price levels.

"I can confirm that there was a trading input error and that the appropriate CBOT resolution committee addressed the error and took appropriate action," he said.

The incident comes on the heels of a similar highly publicised error at the French derivatives exchange MATIF several weeks ago after the Paris-based bourse scrapped its floor trading in favour of an electronic platform.

The CBOT's open outcry, traders said, input errors were bound to be repeated on Screen-based systems, while they might be prevented or dealt with afterwardin a more equitable manner in an open outcry marketplace.

Still, electronic trading has been the biggest topic in the futures industry this year, with EUREX, the all-electronic Swiss-German exchange, taking away the lion's share of the Bund futures business from the London International Futures and Options Exchange and MATIF converting to all-electronic.

Right now, all eyes are on the Sept. 8 launch of the Cantor Financial Futures Exchange (CFFE), a joint venture between Cantor Fitzgerald LP and the New York Board of Trade, which will electronically trade futures on Treasury securities that directly compete with CBOT products.