Chicago Mercantile Exchange (CME) launched European-style
options trading for two fx contracts last week, listing its
prices on the options pricing system from
The two moves highlighted CME's ongoing efforts to align its fx
futures and options products with the OTC market.
"The reason we launched [these contracts] is that they
better mirror the over the counter market for options," said
Rick Sears, CME's managing director, foreign exchange products.
"Now we have a product with the same risk characteristics as an
exchange traded futures product but that can be used without
some of the basis risk around different expirations and
Under European-style rules, options holders are allowed to
exercise contracts only on the date of expiration. American
style options can be exercised into a futures position at any
time prior to expiration.
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