CBOT® Chairman Nickolas J. Neubauer said, "This product is another example of our commitment to combine innovative and creative products with the unmatched liquidity and integrity of the CBOT® and the underlying component markets. Although the initial CBOT® X-Fund components will only include a mix of CBOT® futures contracts, CBOT® X-Funds introduced at a later date may include contracts from other domestic U.S. derivative exchanges, thereby significantly expanding the number of opportunities and possible combinations of components."
CBOT®® X-Funds are short-duration futures contracts based on the performance of a professionally selected futures index. The components that will make up the index will be selected by an Exchange authorized CBOT® X-Fund designer and will be designated as long or short positions. These components and positions will remain fixed throughout the two-week trading cycle.
At expiration all positions are cash-settled and closed out. The CBOT®® X-Fund designers will then introduce the next selection of underlying components for the next trading cycle. These contracts will be made public on the CBOT® website at noon on the Thursday before the next trading cycle begins. This is a unique feature of CBOT® X-Funds and a fundamental departure from traditional indices or composites which typically remain static for long periods of time.
The contracts comprising the first two CBOT® X-Funds scheduled to trade on Friday, February 1, will be made available on Thursday, January 31 at noon and will appear on the front page of the CBOT®'s website at www.cbot.com.
CBOT® Executive Vice President Bernard W. Dan said, "Investors may benefit from the exposure of a futures portfolio specifically designed for performance by a futures market expert. Due to our portfolio approach, the contract offers favorable margin requirements versus the combined margins of the underlying components allowing low cost entry to a professionally designed futures index."
