Contract specifications for CME electronic lean hog futures will be identical to those traded in the open outcry market and fully fungible with the open outcry contracts. Opposing positions in the respective markets will be automatically offset. The contracts will trade on CME's GLOBEX®2 electronic trading system, with electronic lean hogs opening daily at 9:00 a.m. (Central time), 10 minutes before the open outcry market. Both electronic and open outcry markets will close at 1:00 p.m. and will settle at expiration to the CME Lean Hog Index®.
"By offering CME lean hog contracts in an electronically traded version, CME will provide current customers a choice of execution methods and enable the broader customer base of electronic traders to access our commodity products," said CME Vice Chairman Terrence Duffy, a lean hog trader.
Each CME lean hog contract represents 40,000 pounds of pounds of lean value hog carcasses. Three contract months will be listed at all times for electronic trading, corresponding to the three nearby contracts in the open outcry market, with expirations in February, April, May, June, July, August, October and December. The minimum price fluctuation or tick size of $.025 per hundred pounds is equivalent to $10.00 per tick.
Chicago Mercantile Exchange Inc. (www.cme.com) is an international marketplace that brings together buyers and sellers on its trading floors and GLOBEX®2 around-the-clock electronic trading system. 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 $28.4 billion in collateral deposits.
