CME, the world's largest and most diverse financial exchange, announced today the successful launch of the PIMCO(R) StocksPLUS(R) Total Return TRAKRS(SM) product, the twelfth in a series of non-traditional futures products developed jointly with Merrill Lynch (NYSE: MER).
In a special opening procedure concluded on Wednesday, Nov. 1, nearly 1.85 million contracts representing more than $46 million in value were traded. The PIMCO SPTR TRAKRS start their regular trading schedule today and will trade Monday -- Friday from 8:30 a.m. to 3:00 p.m. Chicago time on CME Globex(R).
PIMCO StocksPLUS Total Return TRAKRS are non-traditional futures contracts that seek to outperform the Standard & Poor's 500 Index(R) by combining passive equity index exposure with exposure to an actively managed total return fixed-income portfolio.
TRAKRS, or Total Return Asset Contracts, are designed to enable investors to track an index of stocks, bonds, currencies, commodities or other financial instruments. Outstanding TRAKRS offerings include Long-Short Technology TRAKRS II, Gold TRAKRS, Rogers International Commodity Index TRAKRS, LMC II TRAKRS, BXY TRAKRS and PIMCO Commodity RealReturn DJ-AIG TRAKRS. TRAKRS are the first broad-based index products traded on a U.S. futures exchange that can be sold by securities brokers. Furthermore, when purchased by non-institutional customers and certain "electing institutional customers," they are the first futures contracts that can be held in securities accounts. Each TRAKRS contract, for which CME receives significantly lower than usual clearing fees, has a notional value of approximately $25 at launch.
TRAKRS differ from traditional futures contracts in that they are not leveraged for most long non-institutional customers and electing institutional customers, who are required to post 100 percent of the TRAKRS market value at the time of purchase. As a result, non-institutional customers and electing institutional customers 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 customers and electing institutional customers establishing short TRAKRS positions post 50 percent of the price. Short positions held by non-institutional customers and electing institutional customers are subject to certain maintenance payments if the settlement price increases substantially. Alternatively, if the settlement price decreases significantly, non-institutional customers and electing institutional customers will receive a maintenance payment. Securities brokers, subject to notice registering with the National Futures Association, are able to solicit trades in TRAKRS from non-institutional customers and electing institutional customers.
For more information on this product, please visit: http://www.cme.com/trading/prd/overview_P318343.html.
About Merrill Lynch
Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 37 countries and territories and total client assets of approximately $1.5 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns just under half of BlackRock, one of the world's largest publicly traded investment management companies, with approximately $1 trillion in assets under management. For more information on Merrill Lynch, please visit http://www.ml.com .
About CME
CME ( http://www.cme.com ) is the world's largest and most diverse financial exchange. As an international marketplace, CME brings together buyers and sellers on the CME Globex(R) electronic trading platform and on its trading floors. CME offers futures and options on futures in these product areas: interest rates, stock indexes, foreign exchange, agricultural commodities, energy, and alternative investment products such as weather, real estate and economic derivatives. CME is a wholly-owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, Nasdaq: CME), which is part of the Russell 1000(R) Index and the S&P 500(R) Index.
Chicago Mercantile Exchange, CME, the globe logo and CME Globex are registered trademarks of Chicago Mercantile Exchange Inc. TRAKRS, Total Return Asset Contracts and other trade names, service marks, trademarks and registered trademarks that are not proprietary to Chicago Mercantile Exchange Inc. are the property of their respective owners, and are used herein under license. Further information about CME and its products is available on the CME Web site at http://www.cme.com .
