"Following the early success of the implementation of CBOE's Hybrid Trading System, we are pleased to announce plans for Hybrid 2.0," remarked William J. Brodsky, Chairman and CEO, Chicago Board Options Exchange. "Hybrid 2.0 capitalizes on the unique strengths of CBOE's Hybrid system by expanding the DPM community and allowing market makers to stream quotes remotely into Hybrid classes. Hybrid 2.0 will also provide for streamlined procedures related to crossing rules and the implementation of a revised fee schedule. This phase of Hybrid is a natural evolution of the existing system and its mission of providing the most dynamic trading environment in the options industry."
Hybrid 2.0 will include four major components: One, the creation of a new class of CBOE members, remote Market Makers (RMMs), who will stream quotes into the CBOE to enhance the liquidity base provided by market makers. As part of this initiative, floor-based CBOE market makers will be able to stream quotes into the CBOE while they are away from the trading floor. The fourth and final portion of Hybrid 2.0 involves revisions to CBOE's transaction fee structure to provide incentives for members and member firms to bring substantial additional liquidity and business to the CBOE. A member referendum on the proposal will be held in early December 2003. It is expected that these enhancements would be ready in the first quarter of 2004. CBOE developed the Hybrid Trading System, CBOEdirect HyTS, in an effort to further blend the speed and efficiency of electronic trading with the benefits of a floor-based, auction market. Many customers prefer the deep liquidity and opportunity for price improvement available in an open outcry environment. Answering the demand for the best of both worlds, CBOE launched CBOEdirect HyTS on June 12, 2003, creating a unique trading model unlike that of any other options exchange. There are now 184 active options classes available for trading via CBOEdirect HyTS, representing approximately 50% of U.S. equity options trading volume. By November 30, 2003, CBOE expects to have more than 325 option classes available on the system, and more than 500 classes, representing 90% of U.S. equity options volume, available by year-end. CBOE also offers customers a universal access trading workstation, the CBOE HyTS Terminal, to interface with this revolutionary trading environment. The HyTS Terminal, developed in conjunction with Belzberg Technologies - provides customers with point-and-click electronic access and order routing to CBOE, as well as other options, futures, and stock exchanges - all on a single screen.
More information about CBOEdirect HyTS, including the roll-out schedule, can be found on a special section of CBOE's website at www.cboe.com/AboutCBOE/Spotlight/Default.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, visit the CBOE website at www.cboe.com/ .
