Credit Event Binary Options Cboe

CHICAGO, April 25, 2011 -The Chicago Board Options Substitution (CBOE) announced today that on Tuesday, April 26, the Substitution will continue its roll-out of Credit Issue Binary Options (CEBO^®) with the addition of five new options classes based on financial firms: Banking concern of America Corporation (Ticker: BACD); JPMorgan Chase & Co. (Ticker: JPMD); Citigroup Inc. (Ticker: CITD); The Goldman Sachs Group (Ticker: GSSD); and Morgan Stanley (Ticker: MSTD).

CBOE re-launched newly-designed Credit Outcome Binary Options at the beginning of March with ten initial single-proper name listings (http://www.cboe.com/micro/credit/AvailableCebos.aspx). Since then, there has been demand from market participants for a mechanism to protect confronting potential downside chance in the outcome of default past broker dealers.

Credit Event Binary Options contracts allow investors to express an opinion on whether a company will experience a "credit event" (eastward.g., bankruptcy). Due to changed correlations betwixt credit and equity markets, CEBO contracts tin can be used as a hedging tool for private issuers. The contracts besides provide the advantages of price transparency available through a regulated exchange, currently unavailable in over-the-counter credit default swaps markets.

A CEBO contract has just two possible outcomes - a payout of a stock-still amount if a credit event occurs or cipher if a credit consequence does not occur.

Contract specifications for CEBOs, which first began trading in 2007, were revised this year. One change simplifies the terms of a payout for CEBO contracts, allowing CBOE to list CEBO contracts that specify bankruptcy equally the but trigger for a payout. The size of the CEBO contract payout if a credit event occurs has also been revised. If a bankruptcy occurs prior to expiration of the specific contract, the amount of the payout volition exist $1,000 per contract.

For the five new classes that volition be added tomorrow, initial series expirations will be December 2011, December 2012 and December 2013.

For contract specifications and other data well-nigh CEBOs, see www.cboe.com/credit.

CBOE, the largest U.S. options exchange and creator of listed options, continues to gear up the bar for options trading through product innovation, trading technology and investor teaching. CBOE offers equity, index and ETF options, including proprietary products, such as S&P 500 options (SPX), the almost active U.S. index choice, and options on the CBOE Volatility Alphabetize (VIX). Other products engineered by CBOE include disinterestedness options, security index options, LEAPS options, FLEX options, and benchmark products such as the CBOE S&P 500 BuyWrite Alphabetize (BXM). CBOE's Hybrid Trading System incorporates electronic and open-outcry trading and is powered past CBOEdirect, a proprietary, country-of-the-art electronic platform that as well supports the C2 Options Commutation (C2), CBOE Futures Exchange (CFE), CBOE Stock Exchange (CBSX) and OneChicago. CBOE is abode to the world-renowned Options Institute and world wide web.cboe.com, named "Best of the Web" for options information and pedagogy.

CBOE is regulated past the Securities and Exchange Commission (SEC), with all trades cleared past the AAA-rated Options Clearing Corporation (OCC).

CBOE Media Contacts:
Gail Osten
(312) 786-7123
osten@cboe.com

Gary Compton
(312) 786-7612
comptong@cboe.com

Analyst Contact:
Debbie Koopman
(312) 786-7136
koopman@cboe.com

CBOE®, Chicago Board Options Exchange®, CBSX®, CBOE Stock Exchange®, CEBO®, CFE®, CBOEdirect®, FLEX®, Hybrid®, LEAPS®, CBOE Volatility Index® and VIX® are registered trademarks, and BuyWrite(SM), BXM(SM), SPX(SM), C2SM, C2 Options ExchangeSM, CBOE Futures Commutation(SM) and The Options Institute(SM) are servicemarks of Chicago Board Options Exchange, Incorporated (CBOE). Standard & Poor's®, S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services, LLC. and accept been licensed for use by CBOE. All other trademarks and servicemarks are the property of their respective owners.

Credit Event Binary Options Cboe,

Source: https://ir.cboe.com/news-and-events/2011/04-25-2011/cboe-add-five-new-credit-event-binary-options-cboes-financial-firms-april-26

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