CBOE Announces e-DPMs For Expanded Hybrid Trading System

The Chicago Board Options Exchange (CBOE), the world's largest options exchange, today announced the selection of seven firms to serve as electronic-Designated Primary Market Makers (e-DPMs). e-DPMs were created as a new membership class at CBOE as part of the second phase of its Hybrid Trading System, Hybrid 2.0. The firms named as e-DPMs are:

Citadel Derivatives Group LLC
Citigroup Global Markets
Knight Financial Products
SLK-Hull Derivatives LLC
Susquehanna Investment Group
Timber Hill LLC
Wolverine Trading LLC

"We are extremely pleased to partner with these firms to create the most dynamic trading force in the options industry. Hybrid 2.0 will build on the initial success of the Hybrid trading platform at CBOE, offering members and customers alike the benefits of increased access, market depth and liquidity," said William J. Brodsky, Chairman and CEO of the Chicago Board Options Exchange.

The e-DPM designation was created to expand the benefits of the Hybrid Trading System by enabling a wider range of market participants to access the system. These e-DPMs will increase CBOE's universe of liquidity providers by allowing firms to stream quotes electronically into the CBOE Hybrid Trading System from any location.

Hybrid 2.0 also will include Remote Market Makers (RMMs) who will contribute to the CBOE pool of liquidity by remotely streaming quotes and trading electronically. The RMM designation was created for market makers who prefer to operate solely from outside of the trading crowd. e-DPM and RMM quotes and liquidity will be consolidated with that of in-crowd market participants' through the Hybrid Trading System, resulting in a more robust marketplace with unparalleled liquidity. Implementation of Hybrid 2.0 is expected to begin during summer 2004, pending regulatory approval.

CBOE developed its Hybrid Trading System to further blend the speed and efficiency of electronic trading with the benefits of a floor-based, auction market. The CBOE Hybrid Trading System was launched on June 12, 2003, creating a unique trading model unlike that of any other options exchange.

Currently, there are more than 610 active options classes available for trading via the Hybrid Trading System, representing approximately 90% of U.S. equity options trading volume. CBOE members approved the Hybrid 2.0 initiative through a vote held in December 2003, by a margin of 592 to 163 votes.

More information about the CBOE Hybrid Trading System can be found in a special section of CBOE's website at http://www.cboe.com/AboutCBOE/Spotlight.asp.

CBOE, regulated by the Securities and Exchange Commission (SEC), is the creator of listed options, and the world's largest options marketplace. For additional information about the CBOE and its products, access the CBOE website at http://www.cboe.com/.