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U.S. Futures Exchange to offer futures contracts on Chicago Board of Trade merger
By Lisa Kerner
Charlotte, N.C., March 22 - U.S. Futures Exchange's new futures product lets investors weigh in on the fate of the Chicago Board of Trade, which has received merger proposals from both the Chicago Mercantile Exchange and IntercontinentalExchange Inc.
The contracts, to be listed in late April, are the first of U.S. Futures' Binary Event Futures and were self-certified with the Commodity Futures Trading Commission, according to a company news release.
Binary Event Futures are based on specific business or financial events that impact market participants
U.S. Futures Exchange said it plans to list multiple contracts representing various outcomes and timeframes for the Chicago Board of Trade's possible merger. The contracts will settle on an all-or-nothing basis.
"Our binary futures provide a simple way to hedge against risks associated with either merger possibility," U.S. Futures chief executive officer Satish Nandapurkar said in the release.
IntercontinentalExchange made a proposal to CBOT Holdings, Inc. to combine the two companies in a stock- for-stock transaction.
Under the proposal, IntercontinentalExchange would issue 1.42 of its shares for each CBOT class A common share, valued at $187.34 per share, a 10.5% premium to the value of the pending acquisition of CBOT by Chicago Mercantile Exchange agreed to in October.
Chicago Mercantile Exchange shareholders are expected to vote on the merger at a special meting on April 4.
Chicago-based U.S. Futures Exchange offers specialized products to meet the unique market demands of retail, hedge fund and institutional customers.
Chicago Mercantile Exchange is the first publicly traded U.S. financial exchange.
CBOT Holdings is a Chicago derivatives trading exchange.
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