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The enhancements, which build on those launched in August 2005 when CME integrated its Enhanced Options System (EOS) onto the CME Globex platform, include:
-- A Top Order Allocation, which is an improved order algorithm that
gives preference to options traders who augment the market with
tighter bids and offers;
-- Market maker protections allowing options market makers to post more
prices and better size orders;
-- Automated Request for Cross (RFC) to automate and simplify procedures
for trades which involve a pre-execution discussion;
-- Additional spread strategy functionality for CME Eurodollar futures
and options on futures; and,
-- Expanded implied functionality for CME Eurodollar futures and pack
spreads.
"Our commitment to further grow our electronic options volume and deliver on our business strategy remains strong, and this new functionality will provide additional liquidity, transparency and price discovery to the electronic CME Eurodollar options market," said Rick Redding, Managing Director, Products and Services for CME. "Market maker protections and top order allocation will encourage tighter and deeper markets, and the additional spread types will make it easier for customers to execute complex trading strategies electronically."
"These new enhancements will greatly increase execution efficiency and flexibility for trading CME Eurodollars electronically," said Robin Ross, Managing Director, CME Interest Rate Products. "We have significantly expanded electronic trading over the past two years of CME Eurodollars, and our continued technology improvements expand the trading of short-term interest rate products where users primarily trade complex spreads. With the implied spreading technology being implemented we will now link outright CME Eurodollar Pack markets with Pack spread markets."
In January 2006, CME Eurodollar futures traded on CME Globex accounted for a monthly record percentage of 84 percent of total CME Eurodollar futures volume. On January 27, CME Eurodollar options volume on CME Globex reached a daily record of 183,672 contracts, representing 18 percent of the total Eurodollar options volume for that day.
CME Eurodollar futures are the world's most actively traded futures contract and serve as a benchmark for investors worldwide. Launched in 1981, CME Eurodollar futures, which track three-month LIBOR (London Interbank Offered Rate), were the first futures product to be settled in cash, rather than physically delivered. The vast majority of CME Eurodollar futures, representing average daily volume in 2006 of 1.85 million contracts, trade on the CME Globex electronic trading platform. CME Eurodollar options are the most actively traded exchange-listed interest rate options in the world, trading an average of over one million contracts per day in 2006. Their liquidity provides traders and hedgers an opportunity to take advantage of their views on the direction of U.S. interest rates.
Chicago Mercantile Exchange Inc. ( 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 CME Globex electronic trading platform and on its trading floors. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.4 billion per day in settlement payments in 2005 and managed $45.6 billion in collateral deposits at December 30, 2005, including $3.2 billion in deposits for non-CME products. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, Nasdaq: CME), which is part of the Russell 1000(R) Index.
Statements in this news release that are not historical facts are forward- looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q, which can be obtained at its Web site at http://www.sec.gov . We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Chicago Mercantile Exchange, CME, the globe logo and CME Globex are registered trademarks of Chicago Mercantile Exchange Inc. Further information about CME and its products is available on the CME Web site at http://www.cme.com.
