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CME Announces E-Mini Lean Hog Contracts

Date 02/03/2000

The Board of Directors of the Chicago Mercantile Exchange (CME) yesterday approved the listing of an "E-mini" lean hog contract-the first traditional agricultural commodity to be traded on the CME's GLOBEX®2 electronic trading system. "Once our 'E-mini' concept proved its success in equity index products, other market sectors showed significant interest in trading similarly sized contracts," CME Chairman Scott Gordon said. "Many of the same kind of investors who appreciate the smaller size and convenience of our existing E-mini products will want to participate in the E-mini lean hog market." "The CME's E-mini lean hog contracts will provide the first opportunity for many individual investors to diversify their allocation into agricultural commodities," CME President and CEO James J. McNulty said. "Many investors appreciate the opportunity to make their own trading decisions, execute their trades and receive virtually instantaneous fills using Internet technology." Proposed contract specifications for CME E-mini lean hog contracts are sized at 10,000 pounds, or one-quarter of the CME's standard-sized 40,000-pound contract. The E-mini version of the contracts will be "fungible" with the standard-sized contracts, allowing traders to offset E-mini lean hogs with an equivalent quantity of larger contracts at a ratio of 4:1. The minimum price increment for E-mini lean hogs will be $0.10 per hundredweight, equal to $10 per contract, and the daily price limit will be $2.00 ($200 per contract) except on the last day of trading when the limit will be $3.00. Trading hours will be from 9:10 a.m. until 1:00 p.m. (Central Time), corresponding to trading hours of the standard sized lean hog contracts.