News Release

SuperDerivatives and CME join forces to provide transparency in exchange-traded FX options

Mon Apr 04 2005

CHICAGO AND NEW YORK, April 4, 2005-SuperDerivatives®, whose SD-FX™ option pricing system is widely regarded as the foreign exchange (FX) market’s benchmark, and CME, the largest US futures exchange and the largest regulated marketplace for FX, today announced that real time market prices for CME’s new European-style Euro FX and Japanese yen options contracts are now available on SuperDerivatives’ SD-FX platform. The prices were made available from the first day of the new contracts’ launch on Sunday, April 3, 2005, at 5:00 pm. Additionally, SuperDerivatives’ numerous users will be able to view indicative volatility levels for CME’s FX options contracts. The large, liquid and sophisticated FX options market is currently concentrated in the OTC market. “Around 90 percent of the banks active in FX options use SD-FX,” said David Gershon, chief executive of SuperDerivatives. “The venture between SuperDerivatives and CME will form a bridge that will help provide greater price transparency between the OTC and exchange-traded FX options markets,” he added. “CME is at the forefront of the emerging convergence of the OTC market and the exchange FX markets,” said Rick Sears, managing director, CME Foreign Exchange. “Services like SuperDerivatives and our just launched, CME FX on Reuters, will result in more dynamic and efficient FX markets. Our new Euro FX and Yen options offer market users European-style expiration, which mirrors the OTC market for options. With SuperDerivatives providing indicative options pricing in volatility terms, these new CME FX options products will be more accessible to a global base of users.” Sears added, “We share SuperDerivatives’ commitment to market transparency, greater market liquidity and efficiency. We are pleased to have this opportunity to work with them and become part of this benchmark foreign exchange options pricing system.” SuperDerivatives will initially provide a new page on SD-FX displaying indicative volatility as generated by its benchmark pricing model, for CME’s options on FX futures. This can be critical, as the real market price for even vanilla options can deviate substantially from the theoretical value produced by Black-Scholes type models. In the second phase, SuperDerivatives will add trading functionality to allow its customers to buy and sell CME FX options contracts through SD-FX. “Exchange-traded FX options are quoted in a slightly different way from what is standard in the OTC market. To avoid confusion, end users need access to a system, such as SD-FX, which provides a real-time comparison between the two markets. SD-FX lets them quickly and easily find out where the best price or trading opportunity is,” explained Gershon. “The new service SuperDerivatives is providing will appeal to many end users, but particularly the numerous banks, hedge funds and commodity trading advisers that are active in both the OTC and the exchange-traded markets,” added Gershon. John McAuliffe, Director, Foreign Exchange, Bank of Montreal/Harris Nesbitt, and a user of the system, said: “SD-FX’s enhanced capability will allow us to quickly and accurately assess CME market opportunities using the same pricing platform that we already use for OTC options.” “SD-FX converts real-time volatility prices into CME tick prices, which not only saves us time but also greatly enhances the transparency between the OTC and exchange-traded markets,” added McAuliffe. “Using FX options is one of the most effective ways to manage currency exposure or to express a trading view. Currently, FX options trade predominantly in the OTC market. Although the market is now far more transparent than it was, in part thanks to SuperDerivatives, many more potential users are likely to use options if there is sufficient liquidity on a well-regulated exchange. Potentially, this is a very significant development,” concluded Gershon. CME offers the largest regulated FX trading complex in the world, providing users with liquid, transparent markets, guaranteed execution and central counterparty clearing risk management on 36 individual FX futures and 21 options on futures products. CME received FX Week’s 2004 eFX award for the best electronic futures platform. Last year, over 51 million FX contracts with a notional value of over $6.2 trillion traded at CME. Notes for editors: SuperDerivatives Since unveiling its first pricing system in 2001, SuperDerivatives has revolutionized the world of option pricing, trading and risk management. The company’s products are now accepted and regarded by the majority of professional traders and analysts as the most powerful, accurate and modern derivatives platforms available - they are widely recognized as the markets’ benchmarks. By introducing an unparalleled level of transparency, SuperDerivatives has brought benefits to the whole of the derivatives community, from buy side to sell side, and from large institution to small. The company remains committed to its original mission - to introduce transparency and deliver powerful trading and risk management tools to all existing and potential derivative users. By making their products available to anyone, SuperDerivatives has created a level playing field in option pricing, trading and risk management. Its systems have won numerous awards. SuperDerivatives operates all over the world and has offices in London, New York, Tokyo, Singapore and Paris. For further information about SuperDerivatives and its products, please visit SuperDerivatives, the SuperDerivatives logo and SD-FX are trademarks of SUPER DERIVATIVES INC. All other company or product names are the trademarks or registered trademarks of their respective holders. CME Chicago Mercantile Exchange Inc. ( is the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on CME Globex® electronic trading platform and on its trading floor. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.5 billion per day in settlement payments in 2004 and managed $44.1 billion in collateral deposits as of Dec. 31, 2004, including $3.1 billion in deposits for non-CME products. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index. Statements in this news release that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, which can be obtained at its Web site at We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Chicago Mercantile Exchange, CME, the globe logo and CME Globex are registered trademarks of Chicago Mercantile Exchange Inc. E-mini is a trademark of CME. CLEARING 21 is a registered trademark of CME and New York Mercantile Exchange, Inc. 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