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Available virtually 24 hours a day on the CME’s GLOBEX®2 electronic trading system, the FORTUNE e-50 Index futures will be the first Internet-based index contracts to trade on the CME. Internet trading will be available through numerous futures brokerage firms.
Designed by the editors of FORTUNE magazine to track the performance of companies shaping the Internet economy, the FORTUNE e-50 Index includes firms that generate a significant share of their revenues from online products or services, as well as those that provide and maintain the Internet infrastructure.
“FORTUNE has identified the right mix of companies that are driving the Internet economy,” CME Chairman Scott Gordon said. “We are pleased to team up with FORTUNE in offering investors a meaningful way to participate in the new economy.”
“Individual investors are participating in the equities market to an unprecedented degree,” CME President and CEO Jim McNulty said. “The same technology that has fueled the growth in online investing was produced by companies that have become the hottest market sector. By offering FORTUNE e-50 Index futures, the CME will provide individual and institutional investors a cost-effective way to manage risk and acquire investment exposure to the Internet sector.”
The FORTUNE e-50 Index, a modified market capitalization weighted index, incorporates four Internet market subsectors—“e-companies,” such as Yahoo! and 18 other companies; net software and service companies, led by Microsoft, comprising 15 companies; 12 net hardware companies, including IBM; and four net communications companies, such as AT&T and MCI WorldCom.
FORTUNE e-50 Index futures contracts are designed to appeal to individual investors who want to participate in the burgeoning Internet sector, as well as institutions using the product for risk management or asset allocation purposes. They offer market participants the ability to gain exposure to the Internet economy with just one trade, at a fraction of the cost of investing in all of the underlying stocks in the index. The CME Clearing House acts as guarantor to each trade executed on the exchange.
Each FORTUNE e-50 futures contract will be sized at $20 times the index, or $20,000 as of the calibration of the index at 1000.00 at the close of trading on Dec. 31, 1999. The cash-settled contracts will expire quarterly in the March quarterly cycle and will have a minimum price fluctuation (tick) of 0.50 index points equal to $10.00. Real-time values are calculated every 15 seconds during the trading day (Symbol: FEX). Further details on the index and its composition are available on FORTUNE’s Web site at www.fortune.com. The CME has established a FORTUNE e-50 Resource Center on its Web site at www.cme.com.
The CME was the first exchange licensed by FORTUNE to develop derivative products based on its indexes.
The Chicago Mercantile Exchange introduced the world’s first successful stock index futures in 1982 with the S&P 500 Stock Index contract, with Nasdaq 100 futures and options joining its product line-up in 1996. With the 1997 introduction of the E-mini S&P 500—electronically traded contracts geared toward individual investors—the exchange reinvented index trading. That product quickly grew to become the CME’s third largest futures contract and inspired the 1999 launch of E-mini Nasdaq 100 futures. Together, the E-mini equity index contracts, also accessible through many brokerage firms via the Internet, are the fastest growing products in the history of the exchange.
The Chicago Mercantile Exchange trades futures and options on futures also on foreign currencies, interest rates and agricultural commodities.
The FORTUNE Group at Time Inc. is comprised of FORTUNE, FSB: FORTUNE Small Business and eCompany Now, and is part of the Time Inc. family of companies.
