CME to Launch Weekly Weather Futures and Options Contracts

Mar 12, 2007, 01:00 ET from CME

    CHICAGO, March 12 /PRNewswire-FirstCall/ -- CME, the world's largest
 and most diverse financial exchange, announced today that it is expanding
 its suite of weather derivatives and rolling out CME Weekly Weather Index
 futures and options on futures on 18 U.S. cities beginning April 2.
     CME now offers Monthly and Seasonal Heating Degree Days (HDD) and
 Cooling Degree Days (CDD) contracts on 35 cities around the world. The
 contracts quantify weather in terms of degrees above or below monthly or
 seasonal average temperatures and attach a dollar amount to the number of
 degrees a month's or season's temperature deviate from an average value for
 that particular city. The new contract will measure the deviations in terms
 of weeks.
     "By listing weekly weather contracts, CME is offering another
 alternative for our customers to hedge their risk associated to weather,"
 Felix Carabello, Director of CME Alternative Investment Products, said. "In
 addition to monthly and seasonal hedges, customers will now have the
 opportunity to have more defined hedges on a shorter time frame. This
 flexibility allows for multiple options to fit a variety of risk management
     Six of the CME Weekly Temperature contracts are scheduled to be
 launched on April 2, including for Atlanta, Boston, Chicago, Cincinnati,
 Dallas and New York City. On April 16, CME Weekly Temperature contracts
 will be added for Baltimore, Des Moines, Detroit, Houston, Kansas City, Las
 Vegas, Minneapolis-St. Paul, Philadelphia, Portland, Sacramento, Salt Lake
 City and Tucson.
     The futures contracts will trade only on the CME Globex(R) electronic
 trading platform from 5 p.m. to 3:15 p.m. Chicago time the following day.
 Trading on all of the contracts will terminate at 9 a.m. Chicago time on
 the first Exchange business day that is at least two calendar days after
 the last calendar day of the respective contract period. Options on all CME
 weather futures will be traded on CME's trading floor from 8:30 a.m. to
 3:15 p.m. Chicago time.
     CME currently lists weather contracts based on aggregate temperatures
 for 35 cities, including 18 throughout the U.S., nine in Europe, six in
 Canada and two in Japan. CME introduced weather derivatives in 1999. In
 2006, nearly 800,000 weather contracts worth a notional value of $21
 billion traded at CME. For more information on CME weather contracts,
 please go to .
     CME ( ) is the world's largest and most diverse
 financial exchange. As an international marketplace, CME brings together
 buyers and sellers on the CME Globex(R) electronic trading platform and on
 its trading floors. CME offers futures and options on futures in these
 product areas: interest rates, stock indexes, foreign exchange,
 agricultural commodities, energy, and alternative investment products such
 as weather, real estate and economic derivatives. CME is a wholly-owned
 subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, Nasdaq:  
 CME), which is part of the Russell 1000(R) Index and the S&P 500(R) Index.
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 forward- looking statements. These statements are not guarantees of future
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