Cboe Credit Event Binary Options

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

CBOE re-launched newly-designed Credit Consequence Binary Options at the outset of March with 10 initial unmarried-name listings (http://www.cboe.com/micro/credit/AvailableCebos.aspx). Since then, in that location has been demand from market participants for a mechanism to protect against potential downside hazard in the event of default by banker dealers.

Credit Outcome Binary Options contracts allow investors to express an stance on whether a visitor will experience a "credit event" (e.chiliad., bankruptcy). Due to changed correlations between credit and disinterestedness markets, CEBO contracts can be used as a hedging tool for individual 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 only two possible outcomes - a payout of a fixed amount if a credit event occurs or nothing if a credit event does not occur.

Contract specifications for CEBOs, which first began trading in 2007, were revised this year. 1 change simplifies the terms of a payout for CEBO contracts, allowing CBOE to list CEBO contracts that specify bankruptcy equally the only 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 will be $1,000 per contract.

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

For contract specifications and other information almost CEBOs, see www.cboe.com/credit.

CBOE, the largest U.South. options exchange and creator of listed options, continues to fix the bar for options trading through production innovation, trading technology and investor didactics. CBOE offers equity, alphabetize and ETF options, including proprietary products, such as South&P 500 options (SPX), the most 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 every bit the CBOE Southward&P 500 BuyWrite Index (BXM). CBOE'southward Hybrid Trading Organization incorporates electronic and open up-outcry trading and is powered by CBOEdirect, a proprietary, state-of-the-fine art electronic platform that likewise supports the C2 Options Exchange (C2), CBOE Futures Exchange (CFE), CBOE Stock Commutation (CBSX) and OneChicago. CBOE is habitation to the world-renowned Options Plant and www.cboe.com, named "All-time of the Web" for options information and pedagogy.

CBOE is regulated by the Securities and Substitution Committee (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

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

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

Cboe Credit Event Binary Options,

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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