CME Rival ELX To List Ultra Long Bond Futures On Jan. 11

Start-up exchange ELX Futures LP plans to introduce a new long-term Treasury futures contract on the same date that rival CME Group Inc. (CME) intends to launch an identical interest rate product.

ELX expects to list ultra long-term U.S. Treasury bond futures on Jan. 11, hoping to steal the thunder from CME's ultra Treasury bond futures, which start up that same day.

Both exchanges hope to profit from investors' desire to use longer-duration instruments to hedge their positions.

Exchange leaders believe there is increased demand for Treasury products as the government significantly boosts the amount of debt it sells to finance deficit spending.

Like with CME, ELX's ultra bond contract will allow the delivery of Treasury securities with maturities of 25 years and up. The traditional 30-year Treasury bond contract will permit delivery of securities with maturities of 15 years or more.

CME officials were not immediately available for comment.

ELX announced in October that it is crafting Eurodollar futures and options meant to mirror CME's benchmark interest rate product. No launch date has been announced yet for ELX Eurodollar futures.

ELX also goes head-to-head with CME on futures tied to two- , five- , and 10-year Treasury notes, in addition to the 30-year Treasury bond.

The all-electronic exchange went online in July. During the first six months, it has attracted approximately 3% market share, which is better than many market watchers had expected. However, trading interest among major future brokers remains somewhat muted.

A consortium of banks, trading firms and technology companies provided the financial backing for the new exchange, claiming it offers a cheaper trading alternative to CME, which is the world's largest futures exchange.

-By Howard Packowitz, Dow Jones Newswires; 312-750-4132; howard.packowitz@dowjones.com

(Jacob Bunge contributed to this report.)

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