“As the economies of Poland, Hungary and the Czech Republic continue to grow significantly and further integrate into the global economy, the need for hedging the associated currency risk on this economic activity has also significantly increased,” said CME Chairman Terry Duffy. “CME’s new FX contracts provide the marketplace with an excellent new tool for managing that risk.”
“With our 2004 volume levels up 33 percent from a record 31.9 million contracts traded in 2003, CME is the world’s leading marketplace for regulated, transparent and highly liquid FX futures trading,” said CME Chief Executive Officer Craig Donohue. “The addition of these important new products further adds to CME’s preeminence as a global foreign exchange risk management center, particularly as 67 percent of our FX volume is transacted electronically on GLOBEX.”
Each of the futures contracts will be listed for trading on both CME’s open outcry trading floor from 7:20 a.m. to 2 p.m. and the GLOBEX® electronic trading platform from 5 p.m. until 4 p.m. the following day (Central time). The last trading day for each futures contract will be the second business day prior to the third Wednesday of the expiration month. Each futures contract will have six expirations listed in the March quarterly cycle.
The new Eastern European currency contracts bring to 36 the number of FX futures products offered by CME. CME also offers options on 27 of its FX futures contracts. The contracts are scheduled to launch Sunday, July 11, 2004 on GLOBEX and Monday, July 12, 2004 on the trading floor.
The Polish zloty and the euro FX/Polish zloty contracts will each be sized at 500,000 zloty. The Polish zloty contract will have a minimum price, or tick size, movement of $0.00002 per zloty (or $10.00). The euro FX/Polish zloty contract will have a tick size of €0.00002 per zloty (€10, approximately $12.00 as of May 24, 2004).
The CME Hungarian forint and euro FX/Hungarian forint contracts will each be sized at 30 million Hungarian forint. The Hungarian forint contract will have a tick size of $0.0000002 per forint (or $6.00) and the euro FX/Hungarian forint contract will have a tick size of €0.0000002 per forint (€6, approximately $7.20 as of May 24, 2004).
The CME Czech koruna and euro FX/Czech koruna contracts will each be sized at four million Czech koruna. The Czech koruna contract will have a tick size of $0.000002 per koruna (or $8.00) and the euro FX/Czech koruna contract will have a tick size of €0.000002 per koruna (€8, approximately $9.60 as of May 24, 2004).
Though the citizenries of Poland, Hungary and the Czech Republic each have voted to join the European Economic and Monetary Union (EMU) and eventually plan to adopt the euro as their national currencies, their “legacy” currencies will continue to be used at least through 2006.
In 2003, CME set a new all-time record for FX futures trading volume with a total 31.9 million contracts traded, the busiest overall year for CME FX futures trading since 1994. In the first quarter of 2004, CME’s electronic FX (eFX) was up 152% from one year ago.
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 $1.5 billion per day in settlement payments in 2003 and managed $38.1 billion in collateral deposits at March 31, 2004. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index.
Chicago Mercantile Exchange, CME and GLOBEX are registered trademarks of Chicago Mercantile Exchange Inc.
