Chicago Mercantile Exchange will offer options on its new five- and 10-year agency note futures contracts beginning Monday. CME agency futures contracts were launched March 14.
Underlying each option will be one CME agency futures contract of the same duration. Options will expire quarterly and exercise is American-style.
The CME is the first exchange to launch agency note futures to meet the market demand for non-callable securities issued by Fannie Mae and Freddie Mac, the nations largest home-lending agencies.