CBOE whipsaws on reports of a possible CME acquisition, briefly halting trading in shares of the options exchange

• Shares in the Chicago Board Options Exchange whipsawed Wednesday after a report that CBOE could be acquired by CME Group.
• The report by the Financial Times, said that CME had approached CBOE with an all-stock deal.
• Shares in CBOE rocketed as much as 12% following the report, which CME denied shortly after.

Shares in the Chicago Board Options Exchange whipsawed on Wednesday after a report emerged that CBOE was in talks to be acquired by CME Group for $16 billion, which CME later denied.

The report by the Financial Times, citing three people familiar with the talks, said that CME had approached CBOE with an all-stock deal that valued the options exchange at a roughly 20% premium to its current $13 billion market cap.

CBOE and CME both declined to comment to the FT, but on Wednesday afternoon, CME released a separate statement denying the "rumors" that it had any discussions with CBOE about an acquisition.

"While the company does not typically comment on rumor or speculation, today's inaccurate information required correction," the statement said.

In the moments following the FT report, shares in CBOE rocketed as much as 12% before snapping back to previous levels after the CME statement about an hour later.

Volatility in CBOE shares was so extreme that trading was shuttered by the market's built-in circuit breakers for about 10 minutes.

CME stock, meanwhile, shed about 3% on the news before recovering somewhat.

CBOE owns the popular VIX volatility index, known as the stock market's "fear gauge." CME Group, which owns the Chicago and New York Mercantile Exchanges, is perhaps best known for its commodity futures offerings.

CBOE was trading at $124.19 as of 3:29 p.m. ET, about flat on the day. CME Group was trading at $199.72, down 2.77%.