The first new contract months to be listed will be May and July, beginning March 10, 2003.
The Board also approved a permit program that allows exchange members who do not typically trade live cattle futures to contribute to liquidity and brokerage services in the new contract months.
"The changes that we are making to the live cattle contract reflect input from industry participants," said CME Chairman Terry Duffy. "By adding serial months to the other changes in contract specifications, we've made the contract a more effective hedging tool."
"Live cattle volume has risen 19 percent in the first two months of this year," said CME President and Chief Executive Officer Jim McNulty. "With the addition of serial months, cattle industry participants will be able to fine-tune their risk management throughout the calendar year."
The Serial Month Live Cattle Permit Program will allow International Monetary Market (IMM), Index and Option Market (IOM) and Growth and Emerging Market (GEM) members of the exchange, all of whom are eligible to participate in the program, to trade for their own accounts and act as brokers in the new serial months of the live cattle contract. Permits will be offered at a price of $1,000 annually. Members will not be allowed to "step down" to a membership division with lesser trading rights for the purpose of participating in this permit program.
In addition to existing trading privileges currently provided for the membership held, a Serial Month Live Cattle Permit holder may trade or enter orders while on the trading floor only in live cattle serial and even month futures contracts. Permit holders participating in the program may enter orders on the trading floor for specified futures in even-month live cattle contracts only as part of a spread transaction with the serial month live cattle futures contracts where either leg of the spread may be executed first.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® around-the-clock 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 moves an average of about $1.8 billion per day in settlement payments and manages $27.4 billion in collateral deposits. On Dec. 6, 2002, Chicago Mercantile Exchange Holdings Inc. (NYSE: CME) and its CME subsidiary became the first publicly traded U.S. financial exchange. For more information about Chicago Mercantile Exchange Holdings Inc. or about Chicago Mercantile Exchange's products, visit the CME Web site at www.cme.com.
