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CME Enhances e-Trading for FX Options

The Chicago Mercantile Exchange (CME) has unveiled new technology upgrades that will make it easier for customers to electronically trade CME options.

 

The enhancements are intended to make it more attractive to electronically trade its 1.2 million contracts-a-day market across the foreign exchange, interest rates, equities and commodities asset classes.

Beginning March 25, 2007, the exchange’s Globex e-trading platform will support user-defined spreads, which allow traders to create, request quotes on, and trade unique options spreads that are not pre-defined on Globex.

CME began the first phase of its user-defined spreads initiative in July 2006 when it launched electronic functionality for “covered” or delta neutral spreads involving CME eurodollar futures and options. Since then, more than 550,000 contracts have traded in covered transactions on CME Globex and that functionality has been extended to all product groups.

“We continue to add new functionality, broaden market access and increase the
types of options products on CME Globex, such as American-style options for FX,” says Rick Redding, managing director, CME Products and Services. “All of our options now trade on the same system, making it easier than ever to trade multiple asset classes of options.”

 

Last year CME electronic options volume averaged 123,000 contracts per day, up 167% from 2005 and now accounts for approximately 13% of its overall options volume.

The exchange has also upgraded EOS Trader, its Internet-based trading application to offer credit controls as well as a shared order book, allowing multiple users to manage a single order book.  The enhancement will also be available through a pilot program for tablet PCs that will be available for CME Eurodollar options floor traders

 

In addition to improved trading functionality, the exchange says it will offer a variety of pricing incentives on transaction fees for options traded on CME Globex. These incentives will begin on May 1, 2007 and will continue through to the end of the year.

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