CME Files For Regulatory Approval To Trade Futures, Options On FORTUNE e-50 Index

The Chicago Mercantile Exchange (CME) announced that it filed today for regulatory approval from the Commodity Futures Trading Commission (CFTC) to trade the FORTUNE e-50 Index, one of two new indexes licensed last week by FORTUNE for trading on the CME. The FORTUNE e-50 Index, a modified capitalization-weighted index designed by the magazine's editors to track the performance of companies shaping the Internet economy, 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. The FORTUNE e-50 will be the first Internet index to trade on the CME. FORTUNE has also licensed the CME to trade futures and options on the FORTUNE 500 Index, a market capitalization-weighted index based on the magazine's signature roster of America's largest 500 companies. FORTUNE is providing details on the two indexes and their composition in its 70th anniversary issue dated March 6, available on newsstands next week and accessible now on the magazine's Web site at www.fortune.com. FORTUNE's e-50 Index incorporates four Internet market sectors-"e-companies," such as America Online and 18 other companies; net software and service companies, led by Microsoft, comprising 16 companies; 11 net hardware companies, such as IBM; and net communications companies, such as AT&T, and three other companies. The modified capitalization weight is designed to ensure that no single stock constitutes more than 10 percent of the index. The FORTUNE e-50 futures and options 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. Each FORTUNE e-50 futures contract will be sized at $25 times the index, or $25,000 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 $12.50. For each index component stock, FORTUNE assigns an Internet revenue factor that represents FORTUNE's proprietary estimate of the current percentage of the company's total revenue attributable to its Internet activities broadly defined. FORTUNE will adjust the Internet revenue factors as needed to help ensure that the index stays in close touch with fast moving markets. The FORTUNE e-50 and FORTUNE 500 indexes were set to a base level of 1000.00 as of the close of trading on December 31, 1999, and real-time values are calculated by Bridge Information Systems America, Inc., every 15 seconds during the trading day. The license agreement with the CME is the first time FORTUNE has licensed its indexes to an exchange for the purpose of developing derivative products. The FORTUNE 500 Index will be based upon the investable subset of the FORTUNE 500. The CME captured 92 percent of U.S. volume and open interest in stock index futures and options on futures for 1999. The exchange trades a larger dollar volume in equity index products than any other exchange in the world. The Chicago Mercantile Exchange introduced the world's first successful stock index futures in 1982 with the S&P 500 Stock Index contract. It soon built a successful equity index complex, including Nasdaq 100 Index futures and options introduced in 1996. The exchange reinvented index trading once again in 1997 with the introduction of the E-mini S&P 500, electronically traded contracts geared toward individual investors. That product quickly grew to become the CME's third largest futures contract and inspired the 1999 launch of E-mini Nasdaq 100 futures. The Chicago Mercantile Exchange trades futures and options on futures also on foreign currencies, interest rates and agricultural commodities, as well as weather derivatives. The FORTUNE Group at Time Inc. is comprised of FORTUNE, FSB: FORTUNE Small Business, and the soon to be launched eCompany Now (May 2000), and is part of the Time Inc. family of companies.