Settlement data for the new European weather contracts will be provided by Earth Satellite Corporation ("EarthSat"), a leader in the weather consulting industry that provides weather and agricultural information to more than 200,000 customers every day. EarthSat has provided data for CME's existing weather contracts since their inception.
The European sites to be listed are Amsterdam-Schiphol, Berlin-Tempelhof, London-Heathrow, Paris-Orly and Stockholm. CME will list a total of 20 new weather products on these cities, including monthly heating degree day (HDD) futures, seasonal heating degree day futures, monthly cumulative average temperature (CAT) futures and seasonal cumulative average temperature futures on each of the five sites. The new indexes will be quoted in degrees Celsius, with each tick representing 100 British pounds (pounds sterling). Options on these 20 new futures contracts also will be available for trading beginning Oct. 3, 2003.
The new U.S-based weather contracts include monthly heating degree day and cooling degree day futures and options on Boston; Houston; Kansas City, Missouri; Minneapolis; and Sacramento, California. The addition of these five cities will bring the number of U.S. cities covered by CME monthly weather products to 15 cities.
In addition, CME will list new seasonal heating degree day and cooling degree day futures and options on Atlanta; Dallas-Fort Worth; Des Moines, Iowa; Las Vegas; Philadelphia; Portland, Oregon; and Tucson, Arizona. The addition of these seven new cities will bring the total number of U.S. cities covered by CME seasonal weather products to 10 cities.
The products will trade 22 1/4 hours per day on CME's GLOBEX® electronic trading platform, with regular trading hours from 5 p.m. (Central time, and 5:30 p.m. on Sunday) to 3:15 p.m. the following day. These hours equate to 11 p.m. (11:30 p.m. on Sunday) GMT/UTC to 9:15 p.m. the following day.
Although CME, the Met Office and its joint venture company WeatherXchange Limited had previously signed a non-binding letter of intent related to certain European weather futures, they were unable to reach a definitive agreement within the requisite time for launching the European products. CME was the first exchange in the world to offer exchange-traded weather derivatives in 1999 and is the world's leading exchange for weather risk management. CME currently lists monthly heating degree day and cooling degree day futures and options on Atlanta; Chicago; Cincinnati; Dallas; Des Moines, Iowa; Las Vegas; New York; Philadelphia; Portland, Oregon; and Tucson, Arizona. On May 26, 2003, CME added seasonal heating degree day and cooling degree day futures and options for Chicago, Cincinnati and New York.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United 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 the first half of 2003 and managed $29.1 billion in collateral deposits at June 30, 2003. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index.
