The patent pending Request for Quote (RFQ) methodology on CME Globex provides customers with real-time indicative prices on more than 70,000 outright contracts and complex spread combinations, including calendars, straddles, strangles and butterfly spreads. More than a dozen committed market makers respond instantly to RFQs with transactable two-sided quotes, guaranteeing that customer orders are filled at the best available price. In addition, market makers will stream actionable bids and offers for hundreds of outrights and standard spreads.
"Increasing the volume of electronically-traded CME Eurodollar options on futures is part of our growth strategy," said CME Chairman, Terry Duffy. "Merging the proven capabilities of our enhanced option system with the worldwide availability of CME Globex dramatically increases the distribution of electronic options execution."
"This innovation enables global risk managers, who already rely on the speed and liquidity of CME Eurodollar futures on CME Globex, even greater latitude in executing their interest rate option strategies," said CME Chief Executive Officer Craig Donohue. "Most importantly, CME's new enhanced options technology revolutionizes the trading of short-term interest rate products where complex strategies dominate. Our centralized order book facilitates transparency and competition among market makers in electronic options markets, which are the hallmarks of CME's successful market model."
Options on CME Eurodollar futures are the most actively traded interest rate option contracts in the world with year-to-date average daily volume of 740,000. The enhanced option system was launched on its own platform at CME in August 2004 and has executed more than 3.2 million CME Eurodollar option contracts. In July 2005, average daily volume for options on CME Eurodollar futures traded on the enhanced option system totaled more than 25,000 contracts. This is an increase from 5,000 contracts per day in January 2005. Volume of Eurodollar options has increased by 42 percent in the first half of 2005 versus the same period in 2004. Integration of the enhanced option system onto CME Globex will provide CME Eurodollar options traders with the following key benefits and features:
-- Compatibility with standard CME APIs and integration with major ISVs
and proprietary front end trading platforms. Twelve CME-Certified
Options Partners ( http://www.cme.com/optionspartners ) will be
providing access to the new functionality;
-- Maximum transparency is ensured since orders are placed anonymously
and every electronic RFQ is sent to every participant simultaneously;
-- Trade confirmations are immediate and are broadcast system wide;
additionally, activity on the CME Globex platform is presented in real
time and is available for viewing at http://www.cme.com/edge ;
-- Efficiency is improved because the integration of the enhanced options
system technology into CME Globex will bring option traders cost
effectiveness via instant trade confirmations, Straight Through
Processing (STP) and automatic linkage to analytical/risk management
systems; and,
-- Increased liquidity commitments from major CME Eurodollar market
makers for 23 hours a day.
Electronic CME Eurodollar options trading on CME Globex provides opportunities for all market participants -- customers, brokers and liquidity providers -- anonymous and transparent execution, combined with the efficiencies of a central order book, straight through processing, and lower transaction costs. More details are available at http://www.cme.com/options .
CME Eurodollars are U.S. dollars on deposit in commercial banks located outside of the United States. CME Eurodollars deposits play a major role in the international capital market, and they have long served as a benchmark interest rate for corporate funding. In July 2005, average daily volume for Eurodollar futures on CME Globex was 1,120,412 contracts and represented nearly 84 percent of total Eurodollar futures traded at CME.
Chicago Mercantile Exchange Inc. ( http://www.cme.com ) is the largest futures exchange in the United States. 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 $1.6 billion per day in settlement payments in the first half of 2005 and managed $43.7 billion in collateral deposits at June 30, 2005, including $4.0 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. E-mini is a trademark of CME. CLEARING 21 is a registered trademark of CME and New York Mercantile Exchange, Inc. S&P, S&P 500, NASDAQ-100, Nikkei 225, Russell 1000, Russell 2000, TRAKRS, Total Return Asset Contracts and other trade names, service marks, trademarks and registered trademarks that are not proprietary to Chicago Mercantile Exchange Inc. are the property of their respective owners, and are used herein under license. Further information about CME and its products is available on the CME Web site at http://www.cme.com .
