Euro Currency TRAKRS are the latest of the innovative new products offered by the exchange in collaboration with Merrill Lynch. Euro Currency TRAKRS are non-traditional futures contracts designed to provide customers with an effective way to gain exposure to the Euro Currency TRAKRS Index. The Euro Currency TRAKRS Index is designed to track the total return performance of the euro relative to the U.S. dollar.
Euro Currency TRAKRS will begin their regular trading schedule on Friday, Aug. 29, 2003, and will trade on business days from 8:30 a.m. to 3:00 p.m. (Central time) on CME's GLOBEX® electronic trading platform.
TRAKRS are designed to enable investors to track an index of stocks, bonds, currencies, commodities or other financial instruments. Previous TRAKRS offerings include Long-Short Technology TRAKRS, Select 50 TRAKRS, LMC TRAKRS and Commodity TRAKRS. TRAKRS are the first broad-based index products traded on a U.S. futures exchange that can be sold by securities brokers. Each TRAKRS contract, for which CME receives significantly lower clearing fees, had a notional value of $25 at launch.
TRAKRS differ from traditional futures contracts in significant ways. TRAKRS are not leveraged for most long non-institutional investors, who are required to post 100 percent of the TRAKRS market value at the time of purchase. As a result, non-institutional investors establishing long TRAKRS positions will not be subject to margin calls or any requirement to make any additional payments throughout the life of their TRAKRS positions. Non-institutional investors establishing short TRAKRS positions post 50 percent of the price. Short positions are subject to certain maintenance payments if the settlement price increases substantially. Securities brokers, subject to notice registering with the National Futures Association, are able to solicit trades in TRAKRS from non-institutional investors. A TRAKRS position can be held in the securities account of a non-institutional investor.
TRAKRS contracts may be held until their expiration (generally three years from their offering date), when they will be cash-settled, or they may be liquidated during regular trading hours.
Qualified Institutional Buyers (QIB) - both buyers and sellers - post a performance bond to be determined by CME's Clearing House Division consistent with its normal margining requirements for futures contracts. QIBs generally include institutions or entities that in the aggregate own and invest on a discretionary basis at least $100 million in securities. Members of CME are treated as QIBs for purposes of trading TRAKRS.
Disclosure documents as well as other information related to TRAKRS are available at www.trakrs.com.
Merrill Lynch is one of the world's leading financial management and advisory companies, with offices in 36 countries and total client assets of approximately $1.1 trillion. As an investment bank, it is a leading global underwriter of debt and equity securities and strategic advisor to corporations, governments, institutions and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world's largest managers of financial assets. For more information on Merrill Lynch, please visit www.ml.com.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® electronic trading platform. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.5 billion per day in settlement payments in the first half of 2003 and managed $29.1 billion in collateral deposits at June 30, 2003. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index.
