CHICAGO - The Chicago Board of Trade has introduced serial expiration months for its Municipal Bond Index options on futures contract.

Effective yesterday, the board began listing monthly expirations starting with the December contract, which trades until Dec. 21. Ted Doukas, group manager for economic analysis at the board, said only the quarterly expirations of December, March, June, and September previously were listed for the contract

Doukas said the addition of serial month expirations will give the market participants more flexibility.

"They can choose what specific option they want," he said.

He pointed out that under the quarterly expiration cycle,traders had to wait 90 days until expiration if they bought the options contract close to the initial trading date.

"There is a demand by customers to trade the options on a shorter time frame," Doukas said.

In a press release, the exchange said that the first serial months listed are January and February and that strike prices for contracts expiring in those months will be listed in one-point increments ranging from 76 to 112.

Serial month contracts will trade until noon, central time, on their last trading day and are exercised into the next quarterly futures contract. Quarterly contracts will trade until 2 p.m. on their last day of trading, according to the board.

In the release, board chairman Patrick Arbor said the change was made because of increasing interest and activity in the futures and options contracts.

The options on futures contracts, which began trading in 1987, have jumped 92.5% in volume this year. As of Monday, volume was 65,372 contracts compared to 33,947 a year ago. Open interest stood at 11,547 contracts, compared to 11,789 in 1992.

In September, the board began pricing The Bond Buyer index of 40 actively traded tax-exempt term bonds two times daily instead of once a day to improve the index's efficiency and allow traders to see prices more frequently.

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