News Release

CME Group to Launch Forex E-Micro Contracts

Wed Feb 18 2009

Smaller contract size and proportionally reduced margins aimed to attract retail participation

 

CHICAGO, Feb. 18 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse derivatives exchange, today announced that it will launch a series of innovative smaller-sized Foreign Exchange (FX) contracts, called Forex E-Micros, designed to enable retail traders and investors to cost-effectively access the security, transparency and liquidity of CME Group's FX products. These contracts are listed with, and subject to, the rules and regulations of CME.

 

"Our new Forex E-micro futures contracts provide the opportunity for a broader universe of customers to mitigate their counterparty risk by trading FX in CME's $100 billion-a-day global FX liquidity pool," said Derek Sammann, CME Group Managing Director, Global Head of FX Products. "Active individual traders looking to participate in the global FX market, or small businesses seeking a cost-effective hedging tool for their FX risk, can choose Forex E-micro futures as a versatile and accessible new resource to manage their exposure. And they can do this with the full investor safeguards of operating in CME Group's regulated environment while benefiting from the transparency and deep liquidity offered by our futures market."

 

"With the emergence of FX as a global asset class and the ever-present need to manage FX risk, futures customers will gain access to the global FX markets in a cost-effective, secure manner," said Christopher Larkin, Vice President, E*TRADE Securities LLC. "We believe that Forex E-micro futures traded at CME provide an ideal introduction to FX and we are pleased to be able to work with CME Group in offering them to our customers."

 

"CME Group continues to roll out innovative products for both the institutional and retail futures trader," said Joseph Cusick, Senior Vice President of Education, OptionsXpress. "We are very excited about offering the new E-Micro FX futures products to our clients."

 

"With Forex E-micro futures traded at CME, for the first time we will be able to offer our customers the standards of security and pricing they deserve when entering into a new asset class for the first time," said Greg Sabatello, President and CEO, Transaction Futures. "Electronically traded and cleared via a central counterparty, these new products ensure on a globally recognized legitimate exchange with transparent fees, which should appeal to spot traders."

 

The Forex E-micro contracts will be one-tenth the size of the corresponding CME FX contracts, making them accessible to active individual traders, small Commodity Trading Advisers (CTAs), and Small Medium Enterprises (SMEs). The contracts will be exclusively traded on the CME Globex® electronic trading platform, the world's largest regulated FX marketplace, which also offers the security of centralized clearing and guaranteed counterparty credit. The new contracts are set to launch in the first quarter of 2009.

 

The Forex E-Micro contracts will be quoted in interbank or "over the counter" (OTC) terms, making it easy for customers to integrate them into their systems and portfolios. Contracts will be launched in the following six currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/JPY, USD/CHF and USD/CAD.

 

All Forex E-micro contracts will be cash-settled and EUR/USD, GBP/USD and AUD/USD contracts will be fully fungible with CME Group's full-sized FX contracts, and margins and exchange fees will be scaled down in proportion with the full-sized versions at roughly one-tenth of the full cost. USD/JPY, USD/CHF and USD/CAD all have a high percentage of margin offset with the larger CME Group FX contracts.

 

CME Group FX is the largest regulated FX marketplace and one of the top two FX platforms in the world with more than $100 billion in daily liquidity. With the addition of the Forex E-micro contracts, the CME Group FX product suite will consist of 49 futures contracts and 32 options contracts based on 20 currencies.

 

More information can be located here www.cmegroup.com/forexmicros.

 

 

CME Group (www.cmegroup.com) is the world's largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York. By acting as the buyer to every seller and the seller to every buyer, CME Clearing virtually eliminates counterparty credit risk. CME Clearing also offers financial safeguards to help mitigate systemic risk, providing the security and confidence market participants need to operate, invest and grow. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, and alternative investment products such as weather and real estate. CME Group is listed on NASDAQ under the symbol "CME."

 

The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex, E-mini and CME ClearPort are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group and its products can be found at www.cmegroup.com.

CME-G

SOURCE: CME Group

Web site: http://www.cme.com/

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