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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!
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