CME Expands Efforts To Grow Trading Volume Of Equity Index Options On Futures Markets - Plan Includes Conversion To European Style Options Expiration And Addition Of Market Makers In E-Mini<SUP><SMALL>™</sup></small> S&P 500® Equity Options

As part of its aggressive growth strategy to increase trading in its equity index options on futures markets, Chicago Mercantile Exchange Inc. (CME), the largest futures exchange in the U.S., today announced all equity index options products listed on the exchange will be converted from American to European style expiration. Additionally, in response to increased demand for electronic trading of CME’s E-mini^™ S&P 500® options on futures contract, the exchange will add designated market makers and introduce a nine-month GLOBEX® customer fee waiver to help generate further liquidity and attract new customer participation in this growing electronic market. Beginning October 1, 2004 through June 2005, the GLOBEX electronic trading fee will be waived for customers trading CME’s E-mini S&P 500 options.

“By trading European style options electronically with designated market makers in our most active E-mini S&P 500 options on futures market, CME will be well positioned to significantly increase trading volume in its equity index options,” said CME Chairman Terry Duffy. “Trading in our E-mini S&P 500 options on futures has doubled since November 2003, along with record open interest. We want to continue to leverage this momentum to benefit our customers and shareholders.”

“One of CME’s main strategies is to promote growth in all of our financial options products and the introduction of European style exercise, as well as market maker and customer pricing incentives for our E-mini S&P 500 equity options, is part of this broader strategy,” said Craig Donohue, CME’s Chief Executive Officer. “We expect to build on the success of our recent launch of electronically traded Eurodollar options, where average daily volume has grown from 3,300 in January 2004 to 33,000 so far this month.”

The conversion to European-style options expiration, which will take place in an orderly fashion over several months as outlined below, applies to all equity index options contracts traded via CME’s electronic or open outcry markets.

Under European-style rules, options holders are allowed to exercise their contract only on the date of expiration vs. American style which can be exercised into a futures position at any time prior to expiration.

The conversion schedule for CME’s equity index options on futures contracts is as follows:

CME Equity index options Contract	Expiration Date	Trading Style
S&P 500; S&P MidCap 400 NASDAQ-100, Russell 2000, Nikkei 225	On or before June 2005	American Style Exercise
S&P 500; S&P MidCap 400 NASDAQ-100, Russell 2000, Nikkei 225	After June 2005	European Style Exercise
E-mini S&P 500, S&P 500 Barra Growth Index, S&P 500 Barra Value	On or before December 2004	American Style Exercise
E-mini S&P 500, S&P 500 Barra Growth Index, S&P 500 Barra Value	After December 2004	European Style Exercise

To give market participants time to make any necessary changes, CME’s March 2005 options on E-mini S&P 500, S&P 500 Barra Growth and S&P 500 Barra Value Index futures, originally scheduled to be listed for trading following the expiration of the September 2004 options, will be listed following the expiration of the October 2004 options on Monday, October 18, 2004. The September 2005 options on S&P 500, S&P MidCap 400 and Russell 2000 stock index futures, originally scheduled to be listed for trading following the expiration of the September 2004 options, will also be listed following the expiration of the October 2004 options on Monday, October 18.

“There are a number of potential new customers who are interested in trading CME’s equity index options contracts, who will be able to trade additional strategies because of the European expiration feature,” said Rick Redding, Managing Director of CME Product & Services. “By building increased liquidity in our E-mini S&P 500 options traded on GLOBEX, we will be able to better serve those customers who prefer to trade electronically.”

With the addition of dedicated market makers who will be committed to providing liquidity, CME will be able to offer users of this market increased levels of flexibility, transparency and execution.

Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in theUnited States. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® electronic trading platform. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.6 billion per day in settlement payments in the first half of 2004 and managed $39.1 billion in collateral deposits as of June 30, 2004. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index.