Security futures is the term used to collectively describe futures on individual stocks, narrow based indexes and Exchange Traded Funds (ETFs). These products are now trading in the U.S. and represent an important new tool for professional traders. Security futures enable money managers, proprietary trading operations and other investors to efficiently execute a variety of trading strategies for U.S. listed equities.

When a security future is traded, both the buyer and seller put up a good faith deposit called margin. Margin requirements are generally 20% of the cash value of contract, although this requirement may be lower if the investor also holds certain offsetting positions in cash equities, stock options or other security futures in the same securities account.

Single stock futures (SSF) are futures contracts on individual stocks or Exchange Traded Funds (ETFs). OneChicago lists futures on many stocks - visit OneChicago.com for an updated list. In late 2000, the U.S. Congress passed legislation lifting the ban on these products, which were already trading in Europe and elsewhere.

A OneChicago single stock futures contract is an agreement for delivery of shares of the underlying security or ETF at a designated date in the future, called the expiration date. The standard size of a OneChicago single stock futures contract is 100 shares of the underlying stock.

Narrow based index futures are futures contracts on narrow based equity indexes (small groups of stocks). OneChicago lists a variety of "boutique" security indexes based on demand from large institutional customers called OneChicago Select Indexes. Each Select Index typically contains up to nine individual stocks and are cash settled. Select Indexes do not have an LMM assigned to them to make two-sided markets. At certain periods there may not be a bid and/or ask.

ETF futures are futures contracts on Exchange Traded Funds. They have similar characteristics to single stock futures, although the underlying security is the fund itself rather than common stock in a specific company. Thus at expiration, the deliverable assets are shares in the underlying ETF.

OneChicago is an electronic exchange committed to becoming the global leader in futures on individual stocks, narrow-based indexes and ETFs. We are a joint venture of the world's premier options and futures exchanges: IB Exchange Corp., Chicago Board Options Exchange (CBOE) and CME Group (CME). Current members of CBOE and CME are automatically members of OneChicago and can trade through existing memberships and accounts. No new membership fees or applications are required.

All market participants have access to trade at OneChicago. Investors do not need to be a member of the exchange to trade at OneChicago and may hold positions in OneChicago security futures in either a securities or a futures brokerage account.

The exchange has been designed to meet the expectations of traders and brokers by providing three distinct advantages:

1. Liquid markets from day one: OneChicago uses a market maker system with a number of Lead Market Makers (LMMs). These LMMs have been selected based on their ability and commitment to make continuous two-sided markets. The benefits that LMMs provide to investors include tighter spreads and the ability to promptly execute orders placed with their brokers.

OneChicago LMMs include globally recognized investment firms and market-making professionals who have demonstrated the experience and financial capacity to meet their contractual obligations to OneChicago. In addition, other market makers will be actively trading along with LMMs to ensure the liquidity that investors value.

*Beginning December 2004, OneChicago is offering a new classification of our single stock futures products. For these particular listings on the single stock futures listings page on this Web site, no LMM will be responsible for making continuous two-sided markets. At certain periods there may not be a bid and/or ask.

2. Lower transaction costs and better fills: As a fully electronic exchange, OneChicago has the potential to provide market participants with lower transaction costs and greater visibility behind the current market. All traders will have the option to view depth of book information including at least the top five bids and offers. Trades are routed, matched and reported electronically, creating fast and accurate trade execution and confirmation.

3. Easy Access through CBOEdirect® or GLOBEX®: Most investors are able to route their orders to OneChicago using their existing account and trading software because OneChicago's products can be traded from either a securities or a futures account. Many brokers are already connected to OneChicago either through CBOEdirect or GLOBEX.