CBOE Files To Quote In Nickels For All Hybrid Options Under $15

The Chicago Board Options Exchange (CBOE) today announced that it was filing with the Securities and Exchange Commission (SEC) to allow quoting in $0.05 increments for all option series priced under $15.00 that trade on CBOE's Hybrid Trading System. As of January 30, 2004, approximately 500 classes trade on the Hybrid System. The proposed rule change is anticipated to take effect in the near future pending regulatory approval.

Non-Hybrid options are exempt from the proposed rule change and trading increments for those classes will remain unchanged. Currently at CBOE, options trade in either nickel or dime increments. Specifically, options below $3.00 trade in $0.05 increments, while options above $3.00 trade in $0.10 increments.

"This rule change represents an aggressive step forward for CBOE," said CBOE Chairman and CEO William J. Brodsky. "The ability to trade in nickel increments, combined with last week's announcement of a new monthly fee cap for firms, underlines our commitment to make CBOE the marketplace of choice for reliable and efficient order handling and for cost effectiveness."

CBOE's monthly fee cap will go into effect February 4, 2004, and includes fees charged on firms' proprietary equity and index option orders, as well as orders in which a firm facilitates a customer order. The cap sets a ceiling of $75,000 per firm, per month, for all firm proprietary orders transactions executed at CBOE, and will apply to member firms whose business is primarily public-customer related.

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/.