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CBOE TO PHASE-IN INCREASED POSITION LIMITS, MORNING EXPIRATION FOR S&P 500 STOCK INDEX OPTIONS

 CBOE TO PHASE-IN INCREASED POSITION LIMITS, MORNING EXPIRATION FOR
 S&P 500 STOCK INDEX OPTIONS
 CHICAGO, July 23 /PRNewswire/ -- The Chicago Board Options Exchange (CBOE) today announced plans to phase-in increased position limits and a morning settlement for S&P 500 stock index options after the August expiration (Aug. 21). The Securities and Exchange Commission approved CBOE's rule changes earlier this week.
 Primarily used by institutional investors, all S&P 500 stock index options listed after the August expiration will have an increase in the basic position limit to 45,000 contracts from 25,000 contracts and settle based on the Friday expiration day opening price. (All existing S&P 500 stock index options will be subject to the 25,000 contract position limit in effect when they were listed.)
 "The amount of assets controlled and managed by institutional investors has grown exponentially in recent years, and expanding hedge position limits for institutional users has been a top priority for CBOE for the past several years," said CBOE Chairman Duke Chapman. "Institutional users of the European-style, S&P 500 stock index options now account for approximately 85 percent of our public customer business in this product, and we have heard from existing market users that they can bring new accounts and additional business to CBOE once the limits are expanded."
 In addition to the basic position limit change, the revised rules will:
 -- eliminate a "telescoping" provision, which required that option positions be reduced to 15,000 contracts before entering the near-term month.
 -- double -- to 150,000 contracts -- the hedge exception that would be available in addition to the regular position limits to qualified customers.
 -- enable money managers to have a 250,000 contract total with a maximum of 135,000 for any single account for hedging purposes; and
 -- provide for a position limit of up to 100,000 contracts for a brokerage firm that is facilitating a public customer order.
 The rule changes also permit an expansion for the qualified hedging strategies to include hedgewraps and hedgewraps accompanied by short puts. In the current program, the qualified hedging strategies are: long stock/long put; long stock/short call; short stock/short put; short stock/long call; and long stock/long debit put spread.
 S&P 500 stock index options trading volume, which surpassed 6.15 million in the first half of 1992, is the second most actively traded index option in the world after CBOE's retail-oriented S&P 100 stock index option (OEX).
 CBOE, regulated by the Securities and Exchange Commission, is the pioneer of listed options and the world's largest options marketplace.
 -0- 7/23/92
 /CONTACT: Stan Lata, 312-786-7392, or Bonnie Greenberg, 312-786-7393, both of CBOE/ CO: Chicago Board Options Exchange ST: Illinois IN: FIN SU:


LD -- NY104 -- 2723 07/23/92 16:37 EDT
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Date:Jul 23, 1992
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