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To: TFF who wrote (11021)	10/30/2003 12:14:11 PM
From: TFF	Respond to of 12617

CBOE opens up membership to boost volumes By Jeremy Grant in Chicago Financial Times; Oct 30, 2003 The Chicago Board Options Exchange, the world's largest options exchange, yesterday unveiled a scheme that offers memberships to traders at other US options exchanges in a bid to attract more trading. The move comes at a time of cut-throat competition among the five US options exchanges. It is similar to efforts by the Chicago Board of Trade, the second-largest US futures exchange, to boost trading volume by offering non-members special memberships that would give them access to lower trading fees currently only enjoyed by CBOT members. The CBOE, which has for years relied on face-to-face trading in "open outcry" pits, feels threatened after being overtaken in equity options trading by the International Securities Exchange, an all-electronic rival that was launched only five years ago. The CBOE said it had created a new class of membership that could be bought by market makers anywhere. Such market makers could access the CBOE's markets, where they could trade remotely through an electronic trading system that the CBOE introduced this summer. Market makers are traders who commit their own capital to buying and selling customer orders at any time during the trading day. By attracting customers, they help increase trading volume at the exchange where they are making markets. The CBOE's move appeared aimed at attracting market makers from the other US options exchanges that operate "open outcry" trading floors: the Philadelphia Exchange, the American Stock Exchange and the Pacific Exchange on the US west coast. CBOE said the purchase of a new class of CBOE membership could be a cheaper option than remaining as a market maker at another exchange. Although volume at the CBOE has been mixed over the past year, September volume was 34 per cent higher than year-ago levels, partly on recent strength in the underlying stock markets.