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CME to offer E-Mini Nasdaq 100 Futures

Date 18/02/1999

The Chicago Mercantile Exchange (CME) today announced plans to trade an E-mini version of its Nasdaq 100 stock index futures contracts, similar to the exchange's highly successful E-mini S&P 500 futures launched in September 1997. "The Merc's Nasdaq 100 stock index futures contract has grown impressively since its 1996 launch," CME Chairman Scott Gordon said. "The time is right for an E-mini version of the Nasdaq contract to build on that success and to offer customers the smaller sized, electronically accessible kind of contract that has proven so popular in our E-mini S&P 500 contract." "The Nasdaq 100 includes many of the stocks in the popular high-tech and Internet area," CME President and CEO Rick Kilcollin said. "E-mini Nasdaq 100 contracts will provide a very efficient method to manage the risk of the stocks in the index or to participate in one of the hottest market sectors." The CME's E-mini Nasdaq 100 futures, at $20 times the index, will be sized at one-fifth the regular Nasdaq 100 futures contract. At recent market levels, the E-mini Nasdaq 100 futures contract would be valued at approximately $40,000. The current Nasdaq 100 futures contract has an underlying value of $100 times the index, currently valued at approximately $200,000. The E-mini Nasdaq 100 contracts will trade via a combination of electronic and open-outcry pit trading, paralleling the method that has proven so successful in E-mini S&P 500 futures. The new contracts will trade electronically virtually 24 hours per day, from 3:30 p.m. until 3:15 p.m. the following day. The smaller contracts will be "fungible" with the larger ones in that positions in the smaller contract may be offset by trading against an equivalent dollar-value of standard-size Nasdaq 100 futures and vice versa. A special E-mini Nasdaq 100 "pit" outfitted with GLOBEX2 screens will be constructed adjacent to the current Nasdaq 100 pit to accommodate traders on the floor. A launch date for trading the contracts will be set pending regulatory approval. The CME has also applied with the Commodity Futures Trading Commission (CFTC) to trade E-mini Nasdaq 100 options. Only the futures contracts will be listed initially on GLOBEX2, however. The CME revolutionized index futures trading in September 1997 with the launch of E-mini S&P 500 futures and options, offered at a time when electronic and Internet trading began to thrive. Concurrently, market savvy investors who make their own trading decisions were poised to use futures and options to manage the risk of their equity portfolios or to utilize index futures as a vehicle for allocating their assets. The resulting volume in E-mini S&P 500 futures has grown to make the product the third most actively traded futures contract on the CME in recent months, behind Eurodollars and standard-sized S&P 500 contracts. For the Nasdaq 100, average daily volume has grown since its 1996 launch from 2,059 contracts to 6,265 contracts year-to date. The CME is the world's leading exchange for equity index futures, offering futures and options on S&P MidCap 400, Russell 2000 and Nikkei 225 and the S&P 500/BARRA Growth and Value Indexes, in addition to the S&P 500 and Nasdaq 100.