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CME to Change Order Quantity Restrictions on Equity Index Contracts



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FYI, from the CME:

April 27, 2001—Chicago Mercantile Exchange Inc. (CME) announced it will 
revise its current order quantity limits in E-mini S&P 500 futures contracts 
effective May 6. The move follows CME Board initiatives begun last August to 
expand customer access and trading choices on the GLOBEX®2 electronic system.

CME will also establish in all electronic equity index markets revised order 
entry restrictions so that orders greater than 250 contracts must be entered 
as multiple entries of 250 contracts or fewer. This enhancement will help 
filter out potentially erroneous trades and protect customers from keyboard 
errors. CME is the first exchange to apply this additional layer of customer 
protection on its electronic trading system. Previously, CME had imposed a 
30-contract order quantity limit in E-mini S&P 500 futures. Similar 
restrictions in E-mini Nasdaq-100 contracts were lifted last summer.

Also on May 6, CME will institute price "banding" for electronic trading of 
equity index products on GLOBEX2. Price banding is an automated order-entry 
screening process designed to prevent entry of buy orders priced 2.5 percent 
or more above and sell orders priced 2.5 percent or more below the last price 
in equity index contracts. Price banding is a safeguard to help prevent 
erroneously priced orders from being entered and executed by the system. 
GLOBEX2 will continue to support normal price movements.

CME maintains an error trade policy for electronically traded products which 
allows the exchange to cancel, or "bust" erroneous or disputed trades under 
specified circumstances. In addition, CME’s price limits, set quarterly and 
coordinated with limits on cash equity markets, prevent trades below 
specified prices that are reset on a quarterly basis. Together, CME’s new 
price banding, error trade policy and equity index price limits provide a 
series of checks on potential erroneous trades filtering into the system.

Chicago Mercantile Exchange Inc. (www.cme.com) is an international 
marketplace that brings together buyers and sellers on its trading floors and 
GLOBEX2 around-the-clock electronic trading system. CME offers futures 
contracts and options on futures primarily in four product areas: interest 
rates, stock indexes, foreign currencies and agricultural commodities. On 
Nov. 13, 2000, CME finalized its transformation into a for-profit, 
shareholder-owned corporation as it became the first U.S. financial exchange 
to demutualize by converting its membership interests into shares of common 
stock that can trade separately from exchange trading privileges. The 
exchange moves about $1 billion per day in settlement payments, manages $30 
billion in collateral deposits and administers more than $1 billion of 
letters of credit.

S&P, S&P 500, Nasdaq, Nasdaq-100, and other trade names, service marks, 
trademarks and registered trademarks that are not proprietary to Chicago 
Mercantile Exchange Inc. are the property of their respective owners, and are 
used herein under license.

Regards,

John J. Lothian

Disclosure: Futures trading involves financial risk, lots of it!