Cboe, CBSX, & CFE Press Releases



CHICAGO - October 20, 2005 -- The Chicago Board Options Exchange (CBOE) will launch Mini-SPX options, based on the Standard & Poor's 500 Stock Index, on Tuesday, October 25, 2005, as previously announced. Mini-SPX options (ticker symbol XSP) will be 1/10th the value of the S&P 500 Index, and will trade on CBOE's Hybrid 2.0 Trading System, which includes Remote Market Makers. Trading XSP options on CBOE's Hybrid Trading System will offer investors a smaller-sized S&P 500 contract with the combined advantages of electronic trading and the open-outcry market on a single platform.

"CBOE's Index options have been the fastest growing segment of our business due to the increased interest in option products that provide the benefit of trading the broad market. The unparalleled liquidity found in CBOE's Index complex and the ease of access through the Hybrid Trading System is a powerful combination that delivers real value to our customers," said CBOE Chairman and CEO William J. Brodsky.

"CBOE now offers a full suite of S&P Index products, each with unique characteristics that appeal to different customers' needs, and combined, will create new trading opportunities. Our new Mini-SPX options provide all the advantages of trading the broad-market S&P 500, yet come in a manageably sized contract, with the certainty of European-style exercise, efficiency of cash-settlement and the benefits of our Hybrid Trading System, all of which will appeal to a wide range of customers," said CBOE Vice Chairman Edward T. Tilly. "Through innovation by our members and new product development team, CBOE is again adding real value, and real options, for investors."

"Historically, options have been a great way to trade the overall direction of the market - as defined by the S&P 500," says Robert Shakotko, Managing Director of Index Services at Standard & Poor's. "With over $3.5 trillion benchmarked to the S&P 500, the new Mini-SPX options will provide investors with access to the world's most followed index in a liquid and affordably-sized contract."

Mini-SPX options are a smaller sized version of SPX options that currently trade at CBOE, and will have similar contract characteristics. The Mini-SPX options are 1/10th the value of the S&P 500 Stock Index, and have a multiplier of $100 (e.g. if the S&P 500 Index is at 1232.56, the Mini-SPX would have a value of 123.26, and notional value of the options would be $12,326). There are no position limits for Mini-SPX options; however, there are reporting requirements for same-side aggregate positions over 100,000 contracts. The last trading day for Mini-SPX options generally will be the Thursday prior to expiration.Trading hours will be 8:30 a.m. to 3:15 p.m. Central Time. Please visit www.cboe.com/miniSPX for additional contract specifications.

In addition to the new Mini-SPX options, CBOE will continue to offer full-value options on the S&P 500 Index (SPX) and S&P 100 Index (OEX), which have traded at CBOE since 1983, as well as options on the Standard & Poor's Depositary Receipts (SPY), referred to as SPDRs. SPX options are full value, cash-settled, with European-style exercise. OEX options are cash-settled, with American-style exercise, and SPY options are American-style exercise, that upon exercise, settle into shares of the SPY Exchange-Traded Fund.

Index options give traders the right to buy or sell the value of an index at a predetermined price within a specific time period.Cash-settled index options result in the delivery or acceptance of a cash amount based on the settlement price of the underlying index. Options with European-style exercise generally can only be "exercised" on the last trading day of the contract period, whereas American-style exercise allows the option holder to exercise the option on any day prior to expiration.

CBOE, the world's largest options exchange and creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about the CBOE and its products, visit the CBOE website at: www.cboe.com.

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