Chicago Merc's E-mini S&P 500 Futures, Options to Inaugurate New Age In Futures Trading Sept. 9



NYSE-Chairman Grasso to Ring Opening Bell



03 Sep, 1997, 01:00 ET from Chicago Mercantile Exchange

    NEW YORK, Sept. 3 /PRNewswire/ -- The launch of new E-mini S&P 500 futures
 and options on the Chicago Mercantile Exchange (CME) will usher in a new age
 melding technology with open outcry pit trading, exchange officials said at a
 New York media briefing in anticipation of the products Sept. 9 kick-off.
 Richard A. Grasso, Chairman and CEO of the New York Stock Exchange, will ring
 the bell inaugurating trading in the new contract at 10:30 a.m. (Chicago time)
 on Tuesday, Sept., 9, CME officials announced.
     Upon its launch, the E-mini S&P 500 will utilize the futures industry's
 first small-order electronic order routing and execution system.  E-mini
 contracts will be executed primarily on the GLOBEX(R) electronic trading
 system, with orders routed through a wide variety of means, including the
 Internet.  E-mini S&P 500 futures will be priced at $50 times the S&P index,
 or about $48,000 at recently trading levels.
     The E-mini contracts, sized at a fraction of the CME's flagship S&P 500
 futures contract -- currently sized at $500 times the index -- are expected to
 attract a wider range of investors, particularly many individual investors for
 whom the current contract size has become too large.
     "This is a computer-driven, Internet-driven, technology-driven world," CME
 Chairman Jack Sandner said.  "The Merc is the first in bringing a genuinely
 new investment opportunity to this world of computer literate and financially
 savvy individuals who take charge of and manage their own assets.  Today, we
 don't have to invite investors to beat a path to our door.  We just invite
 them to sign on and hit the 'enter' key to trade an index of the 500 stocks
 that are the benchmark of the U.S. stock market."
     Merc Chairman Emeritus and Senior Policy Advisor Leo Melamed said, "The
 S&P 500 futures contract is one of the most successful contracts ever
 invented, and the Merc did it.  With the E-mini S&P contract we are again at
 the threshold of leading the futures industry into exciting, uncharted
 territory.  This CME innovation of combining the most sophisticated electronic
 trading systems with the global reach of the Internet, while retaining the
 large order efficiencies of open outcry, will bring the best of many worlds to
 the equity futures marketplace."
     Joining Sandner, Melamed, and Merc President and CEO Rick Kilcollin at the
 briefing were John C. Zwingli, Group Vice President, Standard & Poor's
 Financial Information Services, and Shirley Peterson, Director, Global
 Licensing and Marketing for Index Services, Standard & Poor's.
     "The long-standing successful partnership between the Chicago Mercantile
 Exchange and Standard & Poor's enters a new era with the launch of the E-mini
 S&P 500," said Kilcollin.  "The CME welcomes this addition to the line of
 premier S&P products traded on our exchange, which cover virtually the entire
 spectrum of the equity market in the United States."
     S&P's Zwingli said, "The S&P 500 has become the recognized benchmark for
 the equity market, and we're proud almost half a trillion dollars is tied to
 the index through futures, options and mutual funds.  Our partnership with the
 
 Chicago Mercantile Exchange has been mutually valuable and has clearly met
 investors' needs."
 
     A New System For Trading
     An E-mini trading pit has been constructed in the CME's equity index
 complex, high above and overlooking the main S&P 500 futures pit.
 Encompassing a unique pit design, the new E-mini pit will accommodate the
 array of electronic trading and order routing systems which the new contract
 will utilize, in addition to a full complement of brokers, traders and support
 staff.
     The order entry, routing and trade matching systems for all E-mini options
 and for 30 or fewer E-mini S&P futures will be completely electronic, while
 larger orders will be executed by open outcry on the trading floor via an
 innovative All-Or-None (AON) pit facility.  AON orders allow for trading an
 exact quantity at a single, specified price.
     The CME's Trade Order Processing System (TOPS Route) may be used by member
 firms to enter orders which can go directly to GLOBEX for execution, or to
 generate a printed order to be executed in the pit.  The CME Universal Broker
 Station (CUBS) terminals located in the pit aid brokers in order management
 and execution.
     Two futures contract delivery months -- at launch, December and March --
 and four options on futures will be listed for trading.  The listed options
 will comprise two quarterly expirations and two nearby serial months.  Each
 day the E-mini contract's settlement price will equal the settlement price of
 the CME's main S&P 500 futures contract, so that spread trades between the two
 will require zero margin.
     On regular business days, E-mini futures and options will trade round-the-
 clock with the exception of the 15-minute period needed from 3:15-3:30 p.m.
 for daily settlement and computer maintenance.  After each Friday's close,
 markets will be closed until the regular GLOBEX start-up at 5:30 p.m. Sunday.
 
     The Internet Connection
     For retail customers to place Internet orders, they must have trading
 accounts with futures commission merchants (FCMs) who offer Internet trading.
 A number of CME firms have developed their own Internet order routing systems,
 which are in place for the launch of trading the E-mini.  For firms that do
 not now offer Internet access, the CME is developing an Internet order routing
 system which firms may obtain free of charge.  Currently in a Beta test, this
 system is scheduled to go into production in the next few months.
     Once trading starts, the CME's Web site will provide free, live E-mini
 price quotes, including the best bid and best offer and size of each.  An
 E-mini S&P 500 Resource Center on the CME's Web site, www.cme.com, provides
 links to educational materials, contract highlights, price data, registration
 for E-mini seminars and additional S&P resources.
     Prior to launch, as well as afterward, Internet users can access a new
 on-line simulated trading program, where they can sign up to practice trading
 E-mini S&P 500 contracts in a virtual simulated environment.  Everyone who
 signs up for the simulated trading, available through a special offer with
 Auditrack, Inc., is given $100,000 in simulated funds to trade.
     As part of its educational efforts the Merc is holding seminars in nine
 U.S. and Canadian cities to introduce the product.  Recent seminars in New
 York, Chicago, Los Angeles and San Francisco saw standing-room only crowds in
 each city.
     A joint advertising and direct mail program with the Merc's FCMs and
 introducing brokers has been oversubscribed, exchange officials said, with
 tens of thousands of brochures being sent to firms' customers with their
 statements.
 
     Stock Index Trading on the CME
     The Chicago Mercantile Exchange is the world leader in trading stock index
 products, capturing more than 95 percent of U.S. volume and open interest in
 stock index futures and options on futures for 1996.  The new "mini" contracts
 will augment the Merc's family of stock index products; they will not replace
 the current contracts, which include the S&P/BARRA Growth and Value indexes
 and the S&P MidCap 400 index.
     Launched in 1982, S&P 500 futures and options are today the most widely
 recognized stock index contracts in the world.  In 1996, the Merc traded more
 than 20 million futures contracts -- more than 80,000 per day -- along with a
 record 6 million options on those futures contracts.  In 1997, the underlying
 value of S&P 500 futures trading has averaged more than $35 billion per day.
     The market value of the 500 firms comprising the index is equal to about
 80 percent of the value of all stocks listed on the New York Stock Exchange.
 The S&P 500 is capitalization weighted, representing the market value of all
 outstanding common shares of the firms listed.  The CME also trades futures
 and futures options on interest rate, currency and agricultural products.
     Further information about the Merc and its products is available on the
 CME World Wide Web page at www.cme.com.
 
 

SOURCE Chicago Mercantile Exchange
    NEW YORK, Sept. 3 /PRNewswire/ -- The launch of new E-mini S&P 500 futures
 and options on the Chicago Mercantile Exchange (CME) will usher in a new age
 melding technology with open outcry pit trading, exchange officials said at a
 New York media briefing in anticipation of the products Sept. 9 kick-off.
 Richard A. Grasso, Chairman and CEO of the New York Stock Exchange, will ring
 the bell inaugurating trading in the new contract at 10:30 a.m. (Chicago time)
 on Tuesday, Sept., 9, CME officials announced.
     Upon its launch, the E-mini S&P 500 will utilize the futures industry's
 first small-order electronic order routing and execution system.  E-mini
 contracts will be executed primarily on the GLOBEX(R) electronic trading
 system, with orders routed through a wide variety of means, including the
 Internet.  E-mini S&P 500 futures will be priced at $50 times the S&P index,
 or about $48,000 at recently trading levels.
     The E-mini contracts, sized at a fraction of the CME's flagship S&P 500
 futures contract -- currently sized at $500 times the index -- are expected to
 attract a wider range of investors, particularly many individual investors for
 whom the current contract size has become too large.
     "This is a computer-driven, Internet-driven, technology-driven world," CME
 Chairman Jack Sandner said.  "The Merc is the first in bringing a genuinely
 new investment opportunity to this world of computer literate and financially
 savvy individuals who take charge of and manage their own assets.  Today, we
 don't have to invite investors to beat a path to our door.  We just invite
 them to sign on and hit the 'enter' key to trade an index of the 500 stocks
 that are the benchmark of the U.S. stock market."
     Merc Chairman Emeritus and Senior Policy Advisor Leo Melamed said, "The
 S&P 500 futures contract is one of the most successful contracts ever
 invented, and the Merc did it.  With the E-mini S&P contract we are again at
 the threshold of leading the futures industry into exciting, uncharted
 territory.  This CME innovation of combining the most sophisticated electronic
 trading systems with the global reach of the Internet, while retaining the
 large order efficiencies of open outcry, will bring the best of many worlds to
 the equity futures marketplace."
     Joining Sandner, Melamed, and Merc President and CEO Rick Kilcollin at the
 briefing were John C. Zwingli, Group Vice President, Standard & Poor's
 Financial Information Services, and Shirley Peterson, Director, Global
 Licensing and Marketing for Index Services, Standard & Poor's.
     "The long-standing successful partnership between the Chicago Mercantile
 Exchange and Standard & Poor's enters a new era with the launch of the E-mini
 S&P 500," said Kilcollin.  "The CME welcomes this addition to the line of
 premier S&P products traded on our exchange, which cover virtually the entire
 spectrum of the equity market in the United States."
     S&P's Zwingli said, "The S&P 500 has become the recognized benchmark for
 the equity market, and we're proud almost half a trillion dollars is tied to
 the index through futures, options and mutual funds.  Our partnership with the
 
 Chicago Mercantile Exchange has been mutually valuable and has clearly met
 investors' needs."
 
     A New System For Trading
     An E-mini trading pit has been constructed in the CME's equity index
 complex, high above and overlooking the main S&P 500 futures pit.
 Encompassing a unique pit design, the new E-mini pit will accommodate the
 array of electronic trading and order routing systems which the new contract
 will utilize, in addition to a full complement of brokers, traders and support
 staff.
     The order entry, routing and trade matching systems for all E-mini options
 and for 30 or fewer E-mini S&P futures will be completely electronic, while
 larger orders will be executed by open outcry on the trading floor via an
 innovative All-Or-None (AON) pit facility.  AON orders allow for trading an
 exact quantity at a single, specified price.
     The CME's Trade Order Processing System (TOPS Route) may be used by member
 firms to enter orders which can go directly to GLOBEX for execution, or to
 generate a printed order to be executed in the pit.  The CME Universal Broker
 Station (CUBS) terminals located in the pit aid brokers in order management
 and execution.
     Two futures contract delivery months -- at launch, December and March --
 and four options on futures will be listed for trading.  The listed options
 will comprise two quarterly expirations and two nearby serial months.  Each
 day the E-mini contract's settlement price will equal the settlement price of
 the CME's main S&P 500 futures contract, so that spread trades between the two
 will require zero margin.
     On regular business days, E-mini futures and options will trade round-the-
 clock with the exception of the 15-minute period needed from 3:15-3:30 p.m.
 for daily settlement and computer maintenance.  After each Friday's close,
 markets will be closed until the regular GLOBEX start-up at 5:30 p.m. Sunday.
 
     The Internet Connection
     For retail customers to place Internet orders, they must have trading
 accounts with futures commission merchants (FCMs) who offer Internet trading.
 A number of CME firms have developed their own Internet order routing systems,
 which are in place for the launch of trading the E-mini.  For firms that do
 not now offer Internet access, the CME is developing an Internet order routing
 system which firms may obtain free of charge.  Currently in a Beta test, this
 system is scheduled to go into production in the next few months.
     Once trading starts, the CME's Web site will provide free, live E-mini
 price quotes, including the best bid and best offer and size of each.  An
 E-mini S&P 500 Resource Center on the CME's Web site, www.cme.com, provides
 links to educational materials, contract highlights, price data, registration
 for E-mini seminars and additional S&P resources.
     Prior to launch, as well as afterward, Internet users can access a new
 on-line simulated trading program, where they can sign up to practice trading
 E-mini S&P 500 contracts in a virtual simulated environment.  Everyone who
 signs up for the simulated trading, available through a special offer with
 Auditrack, Inc., is given $100,000 in simulated funds to trade.
     As part of its educational efforts the Merc is holding seminars in nine
 U.S. and Canadian cities to introduce the product.  Recent seminars in New
 York, Chicago, Los Angeles and San Francisco saw standing-room only crowds in
 each city.
     A joint advertising and direct mail program with the Merc's FCMs and
 introducing brokers has been oversubscribed, exchange officials said, with
 tens of thousands of brochures being sent to firms' customers with their
 statements.
 
     Stock Index Trading on the CME
     The Chicago Mercantile Exchange is the world leader in trading stock index
 products, capturing more than 95 percent of U.S. volume and open interest in
 stock index futures and options on futures for 1996.  The new "mini" contracts
 will augment the Merc's family of stock index products; they will not replace
 the current contracts, which include the S&P/BARRA Growth and Value indexes
 and the S&P MidCap 400 index.
     Launched in 1982, S&P 500 futures and options are today the most widely
 recognized stock index contracts in the world.  In 1996, the Merc traded more
 than 20 million futures contracts -- more than 80,000 per day -- along with a
 record 6 million options on those futures contracts.  In 1997, the underlying
 value of S&P 500 futures trading has averaged more than $35 billion per day.
     The market value of the 500 firms comprising the index is equal to about
 80 percent of the value of all stocks listed on the New York Stock Exchange.
 The S&P 500 is capitalization weighted, representing the market value of all
 outstanding common shares of the firms listed.  The CME also trades futures
 and futures options on interest rate, currency and agricultural products.
     Further information about the Merc and its products is available on the
 CME World Wide Web page at www.cme.com.
 
 SOURCE  Chicago Mercantile Exchange