"Soon, investors in small-cap stocks will have the same choice of risk management and asset allocation tools that large-cap and technology investors have had in our E-mini S&P 500 and E-mini Nasdaq-100 products," said CME Chairman Scott Gordon. "E-mini Russell 2000 futures can provide the same cost effectiveness and ease of electronic access that have made our other E-mini index products so popular with customers."
"Customers have electronic access to CME's E-mini equity index products traded on our GLOBEX®2 system through a variety of connectivity options, including the Internet," said CME President and CEO Jim McNulty. "With the listing of E-mini Russell 2000 futures, we will begin offering virtually the entire range of the U.S. equity market in the E-mini format."
Like CME's other E-mini index products, E-mini Russell 2000 futures will be sized at one-fifth the standard-sized version or $100 times the Russell 2000 index price-approximately $48,000 per contract at recent index levels. Contract months to be listed are the March quarterly cycle, and trading hours will be 3:45 p.m. to 3:15 p.m. the following day, Monday-Friday, with trading opening at 5:30 p.m. on Sundays. The "tick" size or minimum price fluctuation will be 0.10 index points, equivalent to $10.00.
CME launched Russell 2000 Index futures in 1993. Average daily volume in the contract during the first seven months of 2001 was 2,202 contracts. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which itself represents approximately 98 percent of the investable U.S. equity market. The Russell 2000 reflects approximately 8 percent of the total market capitalization of the Russell 3000 Index. As of the latest reconstitution of the Russell 2000, the average market capitalization was approximately $530 million; the median market capitalization was approximately $410 million. The largest company in the index had an approximate market capitalization of $1.4 billion.
Like other E-mini equities traded on CME, the new smaller contracts will be "fungible" with the standard ones in that positions in the smaller contract may be offset by trading against an equivalent dollar-value of standard-size Russell 2000 futures and vice versa.
CME's September 1997 launch of E-mini S&P 500 futures and options introduced a new concept to index futures trading, at a time when electronic and Internet trading began to thrive. At the same time, market savvy investors who made their own trading decisions were poised to use futures and options to manage the risk of their equity portfolios or to use index futures as a vehicle for allocating assets. CME followed with E-mini Nasdaq-100 futures in 1999, and the two products have become the fastest growing products in exchange history.
Chicago Mercantile Exchange Inc. (www.cme.com) is an international marketplace that brings together buyers and sellers on its trading floors and GLOBEX2 around-the-clock electronic trading system. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign currencies and agricultural commodities. On Nov. 13, 2000, CME finalized its transformation into a for-profit, shareholder-owned corporation as it became the first U.S. financial exchange to demutualize by converting its membership interests into shares of common stock that can trade separately from exchange trading privileges. The exchange moves about $1.5 billion per day in settlement payments and manages $28.4 billion in collateral deposits.
