CME adds 10 market makers for Eurodollar options on Globex; extends trading hours
Chicago Mercantile Exchange Inc. (CME), the largest U.S. futures exchange, today announced the selection of 10 leading trading firms to provide continuous, transparent and competitive markets for Eurodollar options on GLOBEX(R) when CME's new state-of-the-art options trading functionality is launched in the third quarter.
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The newly selected firms are among the most active participants in CME's options on Eurodollar futures markets and join DRW Trading, who CME announced in March as a lead market maker in the program.
CME's patent-pending Eurodollar options on GLOBEX technology will facilitate trading of complex combination and spread trades typically used with short-term interest rate options products in a fully transparent and competitive execution environment.
"The firms participating in our Eurodollar options on GLOBEX market maker program have years of experience in these highly sophisticated markets and already provide significant liquidity in our Eurodollar options complex," said CME Chairman Terry Duffy. "Their commitment to providing liquidity in this important new trading venue means CME will offer the Eurodollar options marketplace unparalleled flexibility, transparency and execution."
"CME's Eurodollar options volume year-to-date has averaged over 500,000 contracts a day, up over 70 percent since 2001. Our new Eurodollar options on GLOBEX platform will offer real-time options pricing, 'two-click' execution and straight-through processing of trades and will bring a new level of sophistication and ease of use to global interest rate options market participants," said CME CEO Craig Donohue. "While we're launching this new proprietary technology in our Eurodollar options market, we are establishing a plan to expand its benefits to other CME options markets in the near future."
Under the program, lead market makers are required to provide continuous, two-sided indicative quotes for various outright contracts and selected spread combinations. Lead market makers are also obligated to respond to requests for quotes (eRFQs) within specified bid-ask, quantity and response time parameters. The three additional lead market makers selected are:
Chicago Trading Company (CTC)Knight Financial ProductsSKTY Trading
CME has also selected the following seven firms to serve as responding market makers, which are obligated to respond to Requests for Quotes from (eRFQs) within specified parameters:
EquitecGETCOKC-CO IIRonin CapitalSMW TradingSullivan CrouthW.H. Trading
The launch of Eurodollar options on GLOBEX will also result in greater liquidity and price transparency during non-floor trading hours, especially during European trading hours, in which CME's Eurodollar futures contract has already seen significant growth in recent months.
Since January when CME first announced its plans for its new Eurodollar options on GLOBEX functionality, there has been a dramatic increase in Eurodollar futures and options on futures trading both overall and on GLOBEX in particular. Average daily volume in Eurodollar futures on GLOBEX more than tripled from January to April, increasing from approximately 104,000 contracts per day to 396,000 contracts per day.
Separately, Chicago Mercantile Exchange Inc. (CME) today announced that it is further extending the operating hours of GLOBEX(R), CME's electronic trading platform, in response to the growth in electronic trading volume and international participation in its markets.
Effective May 30, 2004, CME will eliminate the GLOBEX trading break that occurs between 10:30 a.m. Central Daylight Time (15:30 Greenwich Mean Time) and 5:30 p.m. CDT (22:30 GMT) on many of the observed U.S. holidays. The exceptions to this new procedure will be Christmas, New Year's Day and Good Friday, where current trading schedules will be maintained.
Also, effective May 30, 2004, the Sunday opening time for GLOBEX will be adjusted from 5:30 p.m. CDT (22:30 GMT) to 5:00 p.m. CDT (22:00 GMT) for operational consistency with the market opening Monday through Thursday. Please note that the Sunday pre-opening session will begin at 4:15 p.m. CDT (21:15 GMT).
Additionally, effective May 9, 2004, the trading dates for Interest Rate (IR) and Foreign Exchange (FX) options will be adjusted to coincide with the futures trade date. The options schedule will change to begin a new trade date at 5:00 p.m. CDT (22:00 GMT) as it is for futures, to facilitate hedge transactions in futures and options within the same clearing cycle.
Volume on GLOBEX averaged a monthly record of 1.6 million contracts per day in April 2004, up 62 percent compared to the same period last year. During April, Eurodollar futures on GLOBEX volume jumped to a daily average of 386,000 contracts, up more than 10 times the 35,000 per day in April 2003 and an increase of 80 percent from March 2004.