SPXpm Launch

Extract….

“CBOE Holdings, Inc. (Nasdaq: CBOE) announced plans today to list on C2, the company's new alternative exchange, an electronically-traded version of its flagship S&P 500 Index option (SPX), which it is calling "SPXpm." The Company submitted a rule filing to the Securities and Exchange Commission (SEC) today and plans to list SPXpm upon SEC approval.” …..continue reading

Approval for SPXpm Launch

The Chicago Board Options Exchange announced on Friday, September 2nd, 2011, that the Securities and Exchange Commission had approved its rule filing for the SPXpm launch, on a pilot basis. SPXpm is proposed as the new S&P 500 Index option product.

Trading of SPXpm Options

Since then, CBOE Holdings, Inc. (NASDAQ: CBOE) has announced that it will begin trading SPXpm, its new S&P 500 Index options product, on Tuesday, October 4. SPXpm options will be traded on the Company's all-electronic C2 Options Exchange (C2).

C2's SPXpm product is a cash-settled index option based on the S&P 500 Index, the premier benchmark of the broader U.S. market. SPXpm is similar in structure to the Chicago Board Options Exchange's (CBOE) flagship S&P 500 SPX contract, the most-actively-traded U.S. index option product, except it has "p.m." settlement.

"We are pleased to announce a launch date for what we believe will be another major product for CBOE Holdings," said CBOE Holdings Chairman and Chief Executive Officer William J. Brodsky in regard to the SPXpm launch. "In designing an electronic compliment to our flagship SPX option, we worked closely with customers to create the "best in class" among electronically traded S&P 500 products. The result is a product tailored to provide point-and-click access to the S&P 500 Index, with greater efficiency, greater control and lower costs."

One SPXpm option contract is ten times larger than one SPDR ETF options contract (SPY), significantly lowering the cost of accessing a p.m.-settled S&P 500 contract. The new contract also features the ease of cash settlement, as opposed to physical settlement in ETF options. Finally, SPXpm uses European exercise, which eliminates the risk of early assignment.

SPXpm should appeal to a diverse group of customers including active traders, high-net-worth investors, retail online users and high frequency traders. OTC participants may use SPXpm as an exchange-traded alternative that eliminates counterparty risk.

The launch of SPXpm will enable CBOE to broaden its customer reach by providing two very deep pools of liquidity to trade the S&P 500 Index -- one trading SPXpm electronically on C2, and the other trading the traditional SPX product with the ability to negotiate large, complex orders afforded by floor trading at CBOE.

A complete overview of SPXpm, including key features of SPXpm options, can be found by clicking on http://www.cboe.com/SPXpm.

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