The Eagle release (an acronym for Electronic Arbitrage GLOBEX Liquidity Enhancer) will enable customers to execute trades electronically in the first eight quarterly expirations and 22 corresponding calendar spreads in Eurodollar futures.
The Eagle Project's launch will follow CME's successful deployment of technology upgrades last week in conjunction with the launch of its Remote Data Center (RDC), which now serves as the primary site for the operation of GLOBEX. The advanced Eagle software has been installed at the RDC.
"The significant technology and infrastructure upgrades that we have recently put in place have resulted in performance, speed and capacity improvements and serve as the foundation from which Eagle will launch," said CME Chairman Terry Duffy. "We want to make sure we support the ambitious OneChicago project before we proceed to the Eagle launch."
"Eagle's significance is that it will enable CME customers, for the first time, to trade complex Eurodollar calendar spreads on GLOBEX in a way that replicates how those same spreads trade in the open outcry environment," said CME President and Chief Executive Officer Jim McNulty. "This important milestone for GLOBEX is designed to increase liquidity on the system by creating implied prices for outright orders and spreads."
Following the launch of Eagle in Eurodollars, the new technology will be rolled out to the exchange's other electronically traded products in the coming months. In a second release planned for 2003, the Eagle Project will accommodate additional Eurodollar trading strategies, including packs, bundles and butterflies.
Each CME Eurodollar futures contract represents an interest rate on a three-month deposit of one million U.S. dollars. CME trades quarterly contract expirations on Eurodollars extending out 10 years in the future, allowing customers to extend their short-term interest rate risk management for 10 years. Eurodollars are U.S. dollars on deposit in banks outside of the United States. They have been a benchmark interest rate in corporate funding for decades and, more recently, have replaced U.S. Treasuries as the benchmark for short-term interest rates.
OneChicago, LLC, is the joint venture created to trade single stock futures and narrow-based stock indexes by CME, Chicago Board Options Exchange, Incorporated® (CBOE®), and the Chicago Board of Trade (CBOT®). Orders for OneChicago products may be entered via either GLOBEX or CBOE's CBOEdirect® electronic trading system.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures. As an international marketplace, CME brings together buyers and sellers on its trading floors and virtually around the clock on its GLOBEX electronic trading platform. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moves about $1.5 billion per day in settlement payments and manages $27.1 billion in collateral deposits. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc.
