New Product Advisory Notices
To | Clearing Member Firms
From | CME Clearing
Subject | Hurricane Risk Landfall Options (HuRLOs)
Notice Date | 2008-08-25
Notice Number | NP 08-09
Effective Date | 2008-08-25
HuRLOs are OTC commodity options on which coastal region along the U.S. Atlantic or Gulf coast a hurricane will make landfall first. For example, the Dec 08 W2FBW HuRLO is automatically exercised and pays to the buyer if the second storm of hurricane-strength following the HuRLO product launch makes landfall in Broward County, Florida. In 2008, seventy-nine different HuRLOs will be available in two series. The first series corresponds to the first storm of hurricane-strength to make landfall on the U.S. Atlantic or Gulf coast, and the second series corresponds to the second such storm to make landfall. If two hurricanes make landfall, then additional series will be listed. HuRLOs are offered by Weather Risk Solutions and are cleared by CME Clearing. For more information see Clearing Advisory 08-188 at www.cme.com/clearing/clr/clradv/Chadv08188.html and the HuRLOs website at www.hurlos.com. For the full-text of this advisory, please click here.