In a special opening procedure concluded on Tuesday, Jan. 31, 2.9 million contracts representing more than $72.5 million in value were traded. The LMC II TRAKRS start their regular trading schedule today and will trade Monday - Friday from 8:30 a.m. to 3:00 p.m. Central time on the CME(R) Globex(R) electronic trading platform.
LMC II TRAKRS futures are designed to track the performance of the LMC II TRAKRS index, which in turn tracks the LMC index, a total return index designed and maintained by Merrill Lynch and which is comprised of selected growth and value stocks of lower market cap companies.
TRAKRS, or Total Return Asset Contracts(R) 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, Commodity TRAKRS, Euro Currency TRAKRS, Gold TRAKRS and Rogers International Commodity Index 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 investors, 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 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 held by non-institutional investors are subject to certain maintenance payments if the settlement price increases substantially. Alternatively, if the settlement price decreases significantly, non- institutional investors 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 investors.
