exchange - cboe€¦ · exchange rule 3.6(b). for seat market quotes, call ... 160 cranston ct....

The Constitution and Rules of the Chicago Board Options Exchange, Incorporated ("Exchange"), in certain specific instances, req uire theExchange to provide notice to the Exchange membership. To satisfy this requirement, a complimentary copy of the Exchange Bulletin ,including the bi-monthly Regulatory Bulletin , is delivered to all individual members and nominees of member organizations on a weeklybasis.

Additional subscriptions may be obtained by submitting your name, firm, mailing address, e-mail address and telephone number to : ChicagoBoard Options Exchange, Attention: Investor Services Department, 400 South LaSalle, Chicago, Illinois 60605. The cost of an ann ual sub-scription (July 1 through June 30) is $100 ($50 after January 1) for hard copy delivery or $50 ($25 after January 1) for e-mail delivery, payablein advance. Non-members are welcome to subscribe.

Exchange BulletinJuly 10, 1998 Volume 26, Number 27

MEMBERSHIP INFORMATION FOR June 25, 1998 THROUGH July 1, 1998

Members are required to report any address or telephone number changes to the Membership Department at (312) 786-7449 pursuant toExchange Rule 3.6(b). For Seat Market Quotes, call (312) 786-7456.

SEAT MARKET QUOTES as of July 3, 1998 SEAT MARKET QUOTES as of June 30, 1998

Bid: $475,000.00 Bid: $475,000.00

Offer: $530,000.00 Offer: $530,000.00

Last Sale: $480,000.00 on June 30, 1998 Last Sale: $480,000.00 on June 30, 1998

PERMIT MARKET QUOTES as of July 3, 1998 PERMIT MARKET QUOTES as of June 30, 1998

Bid: $87,000.00 Bid: $87,000.00

Offer: $140,000.00 Offer: $140,000.00

Last Sale: $130,000.00 on May 6, 1998 Last Sale: $130,000.00 on May 6, 1998

OPTION TRADING PERMIT- LEASE POOL as of July 3, 1998

Highest Bid: No Bid Highest Monthly Rate: $4,200.00

OTP's Available: None Lowest Monthly Rate: $50.00

Last Lease: $250.00 on July 1, 1998

Membership Sales and Transfers

This notice is given pursuant to Rules 3.15 and 3.16 which permit certain types of claims to be filed with the Membership Depar tmentwithin 20 days from the date of this Exchange Bulletin.

From To Price/Transfer Date

Cowen & Company Societe Generale Securities Corporation Transfer 07/01/98

Cowen & Company Societe Generale Securities Corporation Transfer 07/01/98

Robert J. Mayer Jr. Isomorphism Transfer 07/01/98

FCT Equities L.L.C. Steven V. Taitel $480,000 07/01/98

July 10, 1998 Volume 26, Number 27 The Chicago Board Options Exchange Bulletin

Correction from Bulletin dated July 1, 1998Membership Sales and Transfers

This notice is given pursuant to Rules 3.15 and 3.16 which permit certain types of claims to be filed with the Membership Depar tmentwithin 20 days from the date of this Exchange Bulletin.


Andreas Haberl-Schicker M.B. Partners $480,000 06/24/98

Option Trading Permit Sales and Transfers

This notice is given pursuant to Rules 3.27, 3.15 and 3.16 which permit certain types of claims to be filed with the MembershipDepartment within 20 days from the date of this Exchange Bulletin.


Cohen, Duffy, McGowan & Co. (Chicago), L.L.C. Spear, Leeds & Kellogg Transfer 06/26/98









MEMBERSHIP APPLICATIONS RECEIVEDThis notice is given persuant to Exchange Rule 3.9. Please send anycomments to the Membership Committee in care of the MembershipDepartment.

Individual Member Applicants Date Posted

Berton Rubin, Nominee 06/25/98William P Kollada, Jr., Inc.9654 KarlovSkokie, IL 60076

Norman C. Peterson, Lessee 06/25/98308 Dale AvenueChicago, IL 60605

Samuel J. Merriott, Nominee 06/25/98Rathunas Trading L.L.C.3706 N. Sheffield - Apt. GDNChicago, IL 60613

William P. Kollada Jr., Nominee 06/25/98William P Kollada, Jr., Inc.P.O. Box 837133 E. Lake Front Dr.Beverly Shores, IN 46301

Matthew R. Tonelli, Nominee 06/26/98Dbs Partners L.P.540 N. Lake Shore Dr. - #202Chicago, IL 60611

John T. Hunt, CBT Registered For 06/29/98NationsBanc-CRT Services, Inc.321 N. County Line RoadHinsdale, IL 60521

Jessica M. Gonzales, Nominee 06/29/98Eclipse J.V10916 S. GreenbayChicago, IL 60617

Steven J. Lim, Nominee 06/30/98Archelon L.L.C.420 W. Surf - Apt. 306Chicago, IL 60657

William D. Keep, CBT Individual 06/30/981644 Cass AvenueLibertyville, IL 60048

Thad J. Cole, Lessee 07/01/98160 Cranston Ct.Glen Ellyn, IL 60137

Martin E. Murphy, CBT Individual 07/01/9861810 Hidden Meadow RoadFerryville, IL 54628

Joseph P. Mearscheimer, Nominee 07/01/98Titan Trading, Inc.800 S. Wells - Ste. 514Chicago, IL 60607

Date Posted


Benjamin Weinberger, Nominee 07/01/98Orbit II Partners, L.P.1136 N. Winchester - #1FChicago, IL 60622

MEMBERSHIP LEASESThis notice is given pursuant to Exchange Rules 3.15 and 3.16 whichpermit certain types of claims to be filed with the Membership De-partment within 20 days from the date of this Exchange Bulletin.

New Leases Effective Date

Lessor: M.B. Partners 06/25/98Lessee: Zahr Trading

Joan K. Bruckner, NOMINEERate: 1% Term: Three Days

Lessor: Mario D’Agostino 06/30/98Lessee: C. Michael O’SheaRate: 281.88 Term: One Day

Lessor: Mario D’Agostino 07/01/98Lessee: John R. HeningtonRate: 1 1/8% Term: Monthly

Lessor: John O. Lavender 07/01/98Lessee: Option Funding Group, L.P.

Mark J. Harlan, NOMINEERate: 1 1/8% Term: Monthly

Lessor: Donaldson Lufkin Jenrette 07/01/98Securities Corporation/Pershing

Lessee: Cole Roesler Traders L.P.Matthew E. Anderson, NOMINEE

Rate: 1 1/8% Term: Monthly

Lessor: Jeffrey S. Kirsch 07/01/98Lessee: William J. FijolekRate: 1 1/8% Term: Monthly

Lessor: Lawrence C. Kaufman 07/01/98Lessee: Herzog, Heine, Geduld, Inc.

Grant W. Lawson, NOMINEERate: 1 % Term: Monthly

Lessor: A.B. Financial L.L.C. 07/01/98Lessee: Blackhawk Financial L.L.C.

Michael Mucharski, NOMINEERate: 1 1/8% Term: Monthly

Lessor: Larkspur Securities, Inc. 07/01/98Lessee: FCT Equities L.L.C.

David P. Connelly, NOMINEERate: 1 1/8% Term: Monthly

Lessor: Kenneth R. Versino 07/01/98Lessee: BOTTA Trading, Inc.

Mark A. Nesci, NOMINEERate: 1 % Term: Monthly

Lessor: Judd Perlson 07/01/98Lessee: BOTTA Trading, Inc.

Gregg A. Kaplan, NOMINEERate: 1% Term: Monthly

Lessor: Patrick J. English 07/01/98Lessee: Blue Horseshoe Trading L.P.

John P. Eshoo, NOMINEERate: 1 1/8% Term: Monthly

Date Posted

Lessor: Isomorphism 07/01/98Lessee: Titan Trading, Inc.

Robert J. Mayer Jr., NOMINEERate: 1 1/8% Term: Monthly

Lessor: M.B. Partners 07/01/98Lessee: Felt Trading Limited Partnership

Anthony J. Carone, NOMINEERate: 1 1/8% Term: Monthly

Lessor: Larkspur Securities, Inc. 07/01/98Lessee: G-Bar Limited Partnership

Jerome P. Williamson, NOMINEERate: 1 1/8% Term: Monthly

Lessor: D & S Partnership 07/01/98Lessee: JSS Investments, L.L.C.

Derrick D. Schroeder, NOMINEERate: 1 1/8% Term: Monthly

Lessor: Larkspur Securities, Inc. 07/01/98Lessee: Christopher P. TerranovaRate: 1 1/8% Term: Monthly

Lessor: Larkspur Securities, Inc. 07/01/98Lessee: Michael B. BittnerRate: 1 1/8% Term: Monthly

Lessor: Merrill Lynch, Pierce, Fenner & 07/01/98Smith, Inc.

Lessee: JSS Investments, L.L.C.Irvin Dale Ramsburg, NOMINEE

Rate: 1 1/8% Term: Monthly

Lessor: SG Cowen Securities Corporation 07/01/98Lessee: Letco DPM L.P.

Adrian Velazquez, NOMINEERate: 1 1/8% Term: Monthly

Lessor: Steven V. Taitel 07/01/98Lessee: Option Funding Group, L.P.

Michael W. Thompson, NOMINEERate: 1 1/8% Term: Monthly

Terminated Leases Termination Date

Lessor: Mario D’Agostino 06/30/98Lessee: Ing TT&S (U.S.) Securities Inc.

Jeffrey S. Dalton (DTN), NOMINEE

Lessor: Cowen & Company 07/01/98Lessee: Letco DPM L.P.

Adrian Velazquez (ADR), NOMINEE

Lessor: Mario D’Agostino 07/01/98Lessee: C. Michael O’Shea (MOS)

Lessor: Emerald Isle Trading Inc. 07/01/98Lessee: Hull Trading Company, L.L.C.

Lessor: Lawrence C. Kaufman 07/01/98Lessee: Thad J. Cole (CLE)

Lessor: John O. Lavender 07/01/98Lessee: Shawn C. Force (SHN)

Lessor: Jeffrey S. Kirsch 07/01/98Lessee: Emerald Isle Trading Inc.

John P. Fahey, III (FHE), NOMINEE

Effective Date


Lessor: Larkspur Securities, Inc. 07/01/98Lessee: RBC Dominion Securities Corporation

William C. Carlson (BBC), NOMINEE

Lessor: Kenneth R. Versino 07/01/98Lessee: Walter O. Teske (WLT)

Lessor: Judd Perlson 07/01/98Lessee: Jay A. Rosenbloom (JRO)

Lessor: D & S Partnership 07/01/98Lessee: William J. Fijolek (FLX)

Lessor: Donaldson Lufkin Jenrette 07/01/98Securities Corporation/Pershing

Lessee: Letco Trading L.P.Thomas P. Shanahan (MXW), NOMINEE

Lessor: A.B. Financial L.L.C. 07/01/98Lessee: Cole Roesler Traders L.P

Matthew E. Anderson (MEA), NOMINEE

Lessor: Larkspur Securities, Inc. 07/01/98Lessee: The Arbitrage Group, L.P.

Daniel P. Morr (DLM), NOMINEE

Lessor: Patrick J. English 07/01/98Lessee: Herzog, Heine, Geduld, Inc.

Grant W. Lawson (GWL), NOMINEE

Lessor: Larkspur Securities, Inc. 07/01/98Lessee: Botta Trading, Inc.

Mark A. Nesci (NSI), NOMINEE

Lessor: Larkspur Securities, Inc. 07/01/98Lessee: Botta Trading, Inc.

Gregg A. Kaplan (KAP), NOMINEE

Lessor: M.B. Partners 07/01/98Lessee: Zahr Trading

Joan K. Bruckner(JNI), NOMINEE

Lessor: Sondra C. Rabin 07/01/98Lessee: Option Funding Group, L.P.

Michael W. Thompson (HRT), NOMINEE

Lessor: Merrill Lynch, Pierce, Fenner & Smith, Inc. 07/01/98Lessee: OTA Limited Partnership

Brian P. Kelly(BPK), NOMINEE

Lessor: Cit Leasing L.L.C. 07/01/98Lessee: Salomon Brothers Inc

David H. Scott(DAV), NOMINEE

OPTION TRADING PERMIT LEASES

New OTP Leases Effective Date

This notice is given pursuant to Exchange Rules 3.15 and 3.27 whichpermit certain types of claims to be filed with the Membership De-partment within 20 days from the date of this Exchange Bulletin.

Lessor: Dowd Broker Group, Inc. 07/01/98Lessee: Titan Trading, Inc.

Brian M. Dowd, NOMINEERate: $2000.00 Term: Monthly

Lessor: Dowd Broker Group, Inc. 07/01/98Lessee: Titan Trading, Inc.

Charles C. Kinsley, NOMINEERate: $2000.00 Term: Monthly

Terminated OTP LEASES Termination Date


Lessor: Cohen, Duffy, McGowan & Co. 06/26/98(Chicago), LLC

Lessee: Spear, Leeds & KelloggAlec D. Pashkow (KAO), NOMINEE


Lessee: Spear, Leeds & KelloggGavin M. Lowrey (GML), NOMINEE


Lessee: Spear, Leeds & KelloggTodd Stuart (TOD), NOMINEE

Lessor: David M. Fleming 07/01/98Lessee: David J. Robbins (NYR)

LEASE POOL OPTION TRADING PERMIT LEASES

New OTP Leases Effective Date

Lessor: Chicago Board Options Exchange 06/25/98Lessee: Shafton Partnership, L.P.

David L. Shafton, NOMINEERate: $1050.00 Term: Monthly

Lessor: Chicago Board Options Exchange 06/26/98Lessee: BE Partners

Christine L. Bookmyer, NOMINEERate: 1000.00 Term: Monthly

Lessor: Chicago Board Options Exchange 06/29/98Lessee: Harold D. JacobsonRate: 1000.00 Term: Monthly

Lessor: Chicago Board Options Exchange 06/29/98Lessee: J.T. Limited Partnership

Michael James Hess, NOMINEERate: 750.00 Term: Monthly

Lessor: Chicago Board Options Exchange 07/01/98Lessee: G-Bar Limited Partnership

Kevin S. Sullivan, NOMINEERate: $1,050.00 Term: Monthly

Terminated OTP Leases Termination Date


Lessor: Chicago Board Options Exchange 06/25/98Lessee: Jeffrey R. Mack (ROS)

Lessor: Chicago Board Options Exchange 06/25/98Lessee: Shafton Partnership, L.P.

David L. Shafton (SHF), NOMINEE

Effective DateEffective Date


Lessor: Chicago Board Options Exchange 06/26/98 (Chicago), LLC

Lessee: Cohen, Duffy, McGowan & Co.John E. Smollen Jr. (ANY), NOMINEE

Lessor: Chicago Board Options Exchange 06/26/98Lessee: Cohen, Duffy, McGowan & Co. (Chicago), LLC

Rex L. Hufnagel (REX), NOMINEE

Lessor: Chicago Board Options Exchange 06/26/98Lessee: Cohen, Duffy, McGowan & Co. (Chicago), LLC

Brentley P. Donaldson (ICK), NOMINEE

Lessor: Chicago Board Options Exchange 06/29/98Lessee: J.T. Limited Partnership

Michael James Hess (HES), NOMINEE

MEMBERSHIP TERMINATIONS

Individual Members Termination Date

CBT Exercisers:

Richard L. Lakin (LKS) 07/01/98141 W. Jackson-Ste 2834Chicago, IL 60604

Joel S. Meyers (WHY) 07/01/981051 Warrington Rd.Deerfield, IL 60015

Mark S. Kruse (MKK) 07/01/98440 S. Lasalle - Ste. 1600Chicago, IL 60605

John C. Gallicho (JNG) 07/01/98230 S. LaSalle St.Chicago, IL 60604

CBT Registered For:

Robert B. Hutchison (RBH) 06/29/98The Dooley Group Inc.440 S. LaSalle - Ste. 1500Chicago, IL 60605

Ronald J. Foresta Jr. (RJF) 07/01/98Blackhawk Financial LLC401 S. LaSalle - Ste 1200Chicago, IL 60605

Lessee(s):

Jeffrey R. Mack (ROS) 06/25/985238 N. MagnoliaChicago, IL 60640

C Michael O’Shea (MOS) 07/01/981351 S. Greenwood Ave.Park Ridge, IL 60068

Thad J. Cole (CLE) 07/01/98160 Cranston CtGlen Ellyn, IL 60137

Shawn C. Force (SHN) 07/01/98Sage Clearing Limited Partnership440 S. LaSalle - Ste 2500Chicago, IL 60605

David J. Robbins (NYR) 07/01/98525 W. Armitage - #2Chicago, IL 60614

Walter O. Teske (WLT) 07/01/982229 N. FremontChicago, IL 60614

William J. Fijolek (FLX) 07/01/981415 Jonester Ct.Naperville, IL 60563

Nominee(s)/Inactive Nominee(s):

Ray J. Dotzman (RAY) 06/26/98Cohen, Duffy, McGowan & Co. (Chicago), LLC440 S. LaSalle St., Ste. #2118Chicago, IL 60605

Kristopher P. Kozub (KPK) 06/26/98Tradelink L.L.C.1755 Ashland CircleWheeling, IL 60090

Douglas P. Kolb (DKX) 06/29/98Tradelink L.L.C.175 W. Jackson - Ste. A1235Chicago, IL 60604

Kieran H. Duffy (KMD) 06/29/98Cohen, Duffy, McGowan & Co. (Chicago), LLC440 S. LaSalle - Ste. 1749Chicago, IL 60605

Richard J. Halloran (HLR) 06/29/98Timber Hill LLC223 W. Jackson - Ste 1014Chicago, IL 60606

Jeffrey S. Dalton (DTN) 06/30/98Ing TT&S (U.S.) Securities Inc.440 S. LaSalle, Ste. 2900Chicago, IL 60605

Alan E. Zimmer (ANJ) 06/30/98Prime International Equities, Ltd.111 W. Jackson - 16th FloorChicago, IL 60604

Michael S. Eisenberg (MIK) 07/01/98Cowen & Company1333 N. BellChicago, IL 60622

Anthony P. Dowd (DBG) 07/01/98Dowd Broker Group, Inc.36 East Larchmont DriveColts Neck, NJ 07722

Thomas P. Shanahan (MXW) 07/01/98Letco Trading L.P.440 S. LaSalle - Ste 3012Chicago, IL 60605

John F. Mc Cleary (JFM) 07/01/98Ing TT&S (U.S.) Securities Inc.440 S. LaSalle, Ste.2800Chicago, IL 60605

Effective DateEffective Date


Richard I. Fader (RIF) 07/01/98The Arbitrage Group, L.P.15 E. Berkley Dr.Arlington Hgts, IL 60004

Member Organizations

Cohen, Duffy, McGowan & Co. (Chicago), LLC 06/26/98440 S. LaSalle, Ste. 1749Chicago, IL 60605

The Dooley Group Inc 06/29/98Attn: William P. Dooley440 S. LaSalle, Suite 1500Chicago, IL 60605

Cowen & Company 07/01/98Attn: Carl MerzFinancial SquareNew York, NY 10005

EFFECTIVE MEMBERSHIPSThis notice is given pursuant to Exchange Rule 3.11.

Individual Members Effective Date

CBT Registered For:

Dean A. Berkiel (TAZ) 06/25/98LFG, L.L.C.1872 N. Clybourn - #115Chicago, IL 60614Type of Business to be Conducted: Market Maker

Wendy A. Wrzesinski (WND) 06/25/98GPZ Trading, L.L.C.230 S. LaSalle - Ste. 688Chicago, IL 60604Type of Business to be Conducted: Market Maker

Lessee(s):

Harold D. Jacobson (HDJ) 06/29/98c/o Sage Clearing440 S. LaSalle, Ste. 2500Chicago, IL 60605Type of Business to be Conducted: Market Maker

C. Michael O’Shea (MOS) 06/30/981351 S Greenwood AvPark Ridge, IL 60068Type of Business to be Conducted: Floor Broker Market Maker

John R. Henington (HTN) 07/01/98440 S. LaSalle, #2800Chicago, IL 60605Type of Business to be Conducted: Market Maker

Christopher P. Terranova (CTR) 07/01/98440 S. LaSalle St., Ste. 2800Chicago, IL 60605Type of Business to be Conducted: Market Maker

Michael B. Bittner (MYC) 07/01/983939 N. SeeleyChicago, IL 60618Type of Business to be Conducted: Market Maker

Effective Date

Nominee(s)/Inactive Nominee(s):

Kevin C. Applehoff (KVN) 06/26/98Letco DPM L.P.1445 W. Cortez, Apt 3Chicago, IL 60622Type of Business to be Conducted: Market Maker Floor Broker

Douglas P. Kolb (DKX) 06/26/98Tradelink L.L.C.175 W. Jackson - Ste. A1235Chicago, IL 60604Type of Business to be Conducted: Market Maker

Kristopher P. Kozub (KPK) 06/30/98Tradelink L.L.C.1755 Ashland CircleWheeling, IL 60090Type of Business to be Conducted: Market Maker

Keith M. Bryant (KMB) 07/01/98JSS Investments, L.L.C.230 South LaSalle, Ste 688Chicago, IL 60604Type of Business to be Conducted: Market Maker

Mark J. Harlan (MJH) 07/01/98Option Funding Group, L.P.401 S. LaSalle, Ste.#1600Chicago, IL 60605Type of Business to be Conducted: Floor Broker Market Maker

Michael Mucharski (MMX) 07/01/98Blackhawk Financial L.L.C.401 S. LaSalle - Ste. 1200Chicago, IL 60605Type of Business to be Conducted: Market Maker

John P. Eshoo (ESH) 07/01/98Blue Horseshoe Trading L.P.440 S. LaSalle Ste 2500Chicago, IL 60605Type of Business to be Conducted: Market Maker

Jerome P. Williamson (YJW) 07/01/98G-Bar Limited Partnership2007 N. Sedgwick , #406Chicago, IL 60614Type of Business to be Conducted: Market Maker

Derrick D. Schroeder (BGD) 07/01/98JSS Investments, L.L.C.230 S. LaSalle, Ste. 688Chicago, IL 60604Type of Business to be Conducted: Market Maker

Brendan Byrd (WMB) 07/01/98G-Bar Limited Partnership3223 N. Clifton Ave.Chicago, IL 60657Type of Business to be Conducted: Market Maker

Irvin Dale Ramsburg (RAM) 07/01/98JSS Investments, L.L.C.1510 N. Hudson, Apt. #1Chicago, IL 60610Type of Business to be Conducted: Market Maker

Effective Date


Effective DateMember Organizations

Titan Trading, Inc. 07/01/98440 S. LaSalle - Ste. 1522Chicago, IL 60605Type of Business to be Conducted: Floor Broker Market Maker

Isomorphism 07/01/98175 W. Jackson - Ste. A1727Chicago, IL 60604Type of Business to be Conducted: Lessor Organization

SG Cowen Securities Corporation 07/01/981221 Avenue Of The AmericasNew York, NY 10020Type of Business to be Conducted: OCC Clear Firm, Non-MemberCustomer Business, Stock Order; Floor Broker

JOINT ACCOUNTSThis notice is given pursuant to Exchange Rule 8.9.

New Participants Acronym Effective Date

John E. Smollen Jr. QLS 06/26/98

Rex L. Hufnagel QLS 06/26/98

Margaret A. Beaver QLS 06/26/98

Kevin C. Applehoff QRX 06/26/98

Monte S. Gores QLS 06/26/98

Brentley P. Donaldson QLS 06/26/98

John H. Waterfield III QLS 06/26/98

Kristopher P. Kozub QGK 06/30/98

Kristopher P. Kozub QSO 06/30/98

Michael P. Mucharski QBF 07/01/98

Irvin Dale Ramsburg QRH 07/01/98

New Accounts

Peter Najarian QPN 06/25/98

John Burkhartzmeyer QPN 06/25/98

Robert A. Fodor QPN 06/25/98

David S. Levinsky QPN 06/25/98

Dale A. De Jong QVT 07/01/98

Keith M. Bryant QVT 07/01/98

Derrick D. Schroeder QVT 07/01/98

Terminated Participants Acronym Termination Date

Kristopher P. Kozub QGK 06/26/98

Kristopher P. Kozub QSO 06/26/98

Robert B. Hutchison QJW 06/29/98

Termination Date

Robert B. Hutchison QKF 06/29/98

Robert B. Hutchison QLD 06/29/98

Richard J. Halloran QTH 06/29/98

Jeffrey S. Dalton QXM 06/30/98

Jeffrey S. Dalton QDX 06/30/98

Jeffrey S. Dalton QUP 06/30/98

Ronald J. Foresta Jr. QBL 07/01/98

Ronald J. Foresta Jr. QBF 07/01/98

Thomas P. Shanahan QNV 07/01/98

John F. Mc Cleary QDX 07/01/98

John F. Mc Cleary QXM 07/01/98

John F. Mc Cleary QUP 07/01/98

Terminated Accounts

Brentley P. Donaldson QCA 06/26/98

Ray J. Dotzman QCA 06/26/98

Kieran H. Duffy QCA 06/26/98

Margaret A. Beaver QCA 06/26/98

John H. Waterfield III QCA 06/26/98

John E. Smollen Jr. QCA 06/26/98

Rex L. Hufnagel QCA 06/26/98

Monte S. Gores QCA 06/26/98

Margaret A. Beaver QCD 06/26/98

Ray J. Dotzman QCD 06/26/98

Kieran H. Duffy QCD 06/26/98

Brentley P. Donaldson QCD 06/26/98

Monte S. Gores QCD 06/26/98

Rex L. Hufnagel QCD 06/26/98

John E. Smollen Jr. QCD 06/26/98

John H. Waterfield III QCD 06/26/98

James G. Condon Jr. QMM 06/29/98

Terrence J. Andrews QMM 06/29/98

James G. Condon Jr. QPP 06/29/98

Terrence J. Andrews QPP 06/29/98

John S. Stafford Jr. QGA 07/01/98

John C. Gallicho QGA 07/01/98


John P. Larocque 07/01/98From: Nominee For Larocque Trading Group L.L.C.;

Market MakerTo: CBT Exerciser Registered For Larocque Trading

Group L.L.C.; Market Maker

James J. Loffredo 07/01/98From: CBT Exerciser Registered For Susquehanna

Investment Group; Floor Broker, Market MakerTo: Nominee For Susquehanna Investment Group;

Floor Broker, Market Maker

Sondra C. Rabin 07/01/98From: Lessor to Option Funding Group, L.P.;To: Owner; Market Maker, Floor Broker

James C. Sauser 07-01-98From: CBT Exerciser registered for Lakota

Trading, Inc.; Market-Maker, Floor BrokerTo: CBT Exerciser registered for LETCO

Trading, L.P.; Market Maker

MEMBER ADDRESS CHANGES

Individual Members Effective Date

Lane Rory Samuels 06/25/981343 W. Walton, #2Chicago, IL 60622

Arlen D. Rubin 06/25/989654 KarlovSkokie, IL 60076

Terence A. Prokop 06/26/98C/O SAGE CLEARING440 S. LaSalle, Suite 2500Chicago, IL 60605

John J. Fox 06/26/98401 S. LaSalle, Ste. 14Chicago, IL 60605

John E. Smollen Jr. 06/26/98Spear, Leeds, & Kellogg440 S. LaSalle - Ste. 2118Chicago, IL 60605

John H. Waterfield III. 06/26/98Spear Leeds, & Kellogg440 S. LaSalle - Ste. 2118Chicago, IL 60605

Jennet B. Lingle 06/26/9815 El Prado CourtSanta Rosa, CA 95405

Margaret A. Beaver 06/26/98Spear, Leeds, & Kellogg440 S. LaSalle, Ste. 2118Chicago, IL 60605

Bradley W. Grant 06/29/98401 S. LaSalle St., Ste. 202Chicago, IL 60605

William E. Vezo 06/29/982709 N. Mildred, Apt 3BChicago, IL 60614

Effective DateCHANGES IN MEMBERSHIP STATUS

Individual Member Applicants Effective Date

Monte S. Gores 06/26/98From: Nominee For Cohen, Duffy, McGowan & Co.

(Chicago), LLC; Floor Broker, Market MakerTo: Nominee For Spear, Leeds & Kellogg;


Brentley P. Donaldson 06/26/98From: Nominee For Cohen, Duffy, McGowan & Co.



Rex L. Hufnagel 06/26/98From: Nominee For Cohen, Duffy, McGowan & Co.



John H. Waterfield III. 06/26/98From: Nominee For Cohen, Duffy, McGowan & Co.



Margaret A. Beaver 06/26/98From: Nominee For Cohen, Duffy, McGowan & Co.



John E. Smollen Jr. 06/26/98From: Nominee For Cohen, Duffy, McGowan & Co.



Jay A. Rosenbloom 07/01/98From: Lessee From Judd Perlson; Market MakerTo: Owner; Market Maker

Raymond Dempsey 07/01/98From: Nominee for Cowen & Company; Floor BrokerTo: Nominee for SG Cowen Securities Corporation;

Floor Broker

Brian M. Dowd 07/01/98From: Nominee For Dowd Broker Group, Inc.;

Floor BrokerTo: Nominee For Titan Trading, Inc.;


Robert J. Mayer Jr. 07/01/98From: Owner ; Market MakerTo: Nominee For Titan Trading, Inc.;


Charles C. Kinsley 07/01/98From: Nominee For Signal House Corp.; Floor BrokerTo: Nominee For Titan Trading, Inc.;


Alexander T. Mc Intosh 07/01/98From: Owner; Market MakerTo: Lessor


Effective Date

QTH 21,000 contracts 10/17/98RQW 15,000 contracts 10/17/98UMZ/OEI 1,725,000 shares 10/17/98AQU/ABU 1,125,000 shares 11/21/98BCQ 50,000 contracts 11/21/98BLC 9,000 contracts 11/21/98DFQ 13,500 contracts 11/21/98FRX 15,000 contracts 11/21/98GCN/GZZ 750,000 shares 11/21/98GD 15,000 contracts 11/21/98IMO 9,000 contracts 11/21/98JZQ/JZZ 1,125,000 shares 11/21/98LVQ/LWQ 2,000,000 shares 11/21/98OFQ/QFZ 25,000 contracts 11/21/98QIQ/QIZ 1,125,000 shares 11/21/98QZY/SGQ 41,000 contracts 11/21/98SGQ/QZY 41,000 contracts 11/21/98SNV/SVV 1,575,000 shares 11/21/98WSM 21,000 contracts 11/21/98CGP 15,000 contracts 12/19/98CQM/QUZ/NWY/NZS 3,750,000 shares 12/19/98EQN 21,000 contracts 12/19/98EVI/WIV 35,000 contracts 12/19/98GLK/GDZ 7,500 contracts 12/19/98HQR/HZR 7,500 contracts 12/19/98QVS/QSZ 1,125,000 shares 12/19/98WIV/EVI 35,000 contracts 12/19/98AAL/VHW 50,000 contracts 1/16/99BQX/BQZ 25,000 contracts 1/16/99CD/VUC/LUL/VFS/ 9,750,000 shares 1/16/99 LFSCI 22,500 contracts 1/16/99CIQ/WCI/VHR 42,000 contracts 1/16/99CTC/VDT/VXD/LDT 4,462,500 ADSs 1/16/99GSB/GVB 10,500 contracts 1/16/99HAL/VHW 50,000 contracts 1/16/99HOT/IZT/VZU 4,900,000 shares 1/16/99IZT/VZU/HOT 4,900,000 shares 1/16/99KRB/LXK//VUK/ 4,500,000 shares 1/16/99 VKX/VZKMER/VME/LME 50,000 contracts 1/16/99MMM/WMU/VMU/ 25,000 contracts 1/16/99 VMVOMM/OMV 7,500 contracts 1/16/99QQR/QUR 675,000 shares 1/16/99QTQ 9,000 contracts 1/16/99STK/VSK/LSK 40,000 contracts 1/16/99TJX 50,000 contracts 1/16/99VFS/LFZ/CD/ 9,750,000 shares 1/16/99 VUC/LULVQT 40,000 contracts 1/16/99

William R. Zolpe 06/29/98414 W. 8th St.Hinsdale, IL 60521

Joseph W. Butler 06/30/98440 S. LaSalle, Ste. 3010Chicago, IL 60605

Noel E. Smith 06/30/98PAX Clearing Company, L.P.440 S. LaSalle, Ste. 3100Chicago, IL 60605

Patrick J. Connelly 07/01/983300 Lake Shore Drive, Apt#4CChicago, IL 60657

Jessica M. Gonzales 07/01/98230 S. LaSalle, Ste.#688Chicago, IL 60604

Jeffrey B. Wynsma 07/01/9826W249 Pinehurst Dr.Winfield, IL 60190

Member Name Change

Member Organizations Effective Date

From: Societe Generale Securities Corporation 07/0198To: SG Cowen Securities Corporation

Effective Date

Class Limit DateBQR/FLT 2,927,500 shares 7/18/98ECL 15,000 contracts 7/18/98ENZ/ENX 472,500 shares 7/18/98EQD/EZD 937,500 shares 7/18/98MEA 15,000 contracts 7/18/98MOQ/MOZ 937,500 shares 7/18/98NWY/CQM 3,320,000 shares 7/18/98ORG/ORY 750,000 shares 7/18/98PQO 50,000 contracts 7/18/98QIG/TWZ 2,500,000 shares 7/18/98QRT 21,000 contracts 7/18/98QTP/ZTP 4,500 contracts 7/18/98TCB 9,000 contracts 7/18/98TWZ/QIG 2,500,000 shares 7/18/98VXQ 50,000 contracts 7/18/98YQC 9,000 contracts 7/18/98HLQ 21,000 contracts 8/22/98IOM 50,000 contracts 8/22/98KOZ/PPZ/PRH 15,000 contracts 8/22/98MHQ 21,000 contracts 8/22/98OAQ/OWQ 1,575,000 shares 8/22/98PGO 21,000 contracts 8/22/98PRH/PPZ/KOZ 15,000 contracts 8/22/98QAG 15,000 contracts 8/22/98QRI/RIU 1,125,000 shares 8/22/98SFE/SGZ 4,500 contracts 8/22/98CSC 21,000 contracts 9/19/98CVC 9,000 contracts 9/19/98FQB/FXB 1,575,000 shares 9/19/98ICN 1,575,000 shares 9/19/98QDA/QXA 675,000 shares 9/19/98RAL/BLW 7,500 contracts 9/19/98XSQ/XYQ 3,750,000 shares 9/19/98WH/WHZ 10,500 contracts 9/19/98WQQ 15,000 contracts 9/19/98XQH 15,000 contracts 9/19/98AC 9,000 contracts 10/17/98BAX/GNW 32,500 contracts 10/17/98BJS 21,000 contracts 10/17/98BQB/BZB 1,125,000 shares 10/17/98CCN/CXN 463,500 shares 10/17/98DAI/DAU 7,500 contracts 10/17/98DLJ 9,000 contracts 10/17/98FQW/FWW 750,000 shares 10/17/98GNW/BAX 32,500 contracts 10/17/98GPT 9,000 contracts 10/17/98GQZ 21,000 contracts 10/17/98KSS 15,000 contracts 10/17/98IQL 15,000 contracts 10/17/98MFQ 50,000 contracts 10/17/98OEI/UMZ 1,725,000 shares 10/17/98ORG/OZG 1,050,000 shares 10/17/98QEB/QXB 787,500 shares 10/17/98

POSITION LIMITS

For all equity options classes except those listed below, the standard position and exercise limits pursuant to Exchange Rule 4 .11 and4.12 will be applicable. For a complete list of all applicable limits, check 2nd floor data information bins or contact the Dep artment ofMarket Regulation. If you wish to receive regular updates of the position limit list, please contact Candice Nickrand at (312) 786-7730 ofthe Department of Market Regulation.

Class Limit Date


Class Limit DateVUZ/THQ/VTH/ 6,875,000 shares 1/16/99 LTHAPC 15,000 contracts 2/20/99EQL 50,000 contracts 2/20/99JNY 21,000 contracts 2/20/99MZY/OFQ/OFZ 3,103,000 shares 6/20/99AIG/VAF/LAJ/ 3,750,000 shares 1/22/2000 VXE/LVJAN/VAQ/LAQ 50,000 contracts 1/22/2000AOL/VAN/LOL 50,000 contracts 1/22/2000ARC/VFR/LFR 40,000 contracts 1/22/2000BAC/VBA/LBA 50,000 contracts 1/22/2000CYQ/VYC/LCY/CYZ 3,750,000 shares 1/22/2000 VYV/LYLDD/VDD/LDD 50,000 contracts 1/22/2000EMC/VUE/LUE 50,000 contracts 1/22/2000CNC/UNG/VJS/LLG 4,775,000 shares 1/22/2000CPB/VLL/LLL/ZCP/ 25,000 contracts 1/22/2000 VXL/ULLF/VFO/LFO/FZ/ 25,000 contracts 1/22/2000 VFV/LFVGM/LGM/ 25,000 contracts 1/22/2000 VGN/LGZGPS/VGS/LGS 3,750,000 shares 1/22/2000 VWS/LVPHWP/VVX 32,500 contracts 1/22/2000

IBM/VIB/LIB 50,000 contracts 1/22/2000LTD/VLD/LLD/TDU 25,000 contracts 1/22/2000 VUD/LDXLU/VEU/LUN 50,000 contracts 1/22/2000LUV/VUV/LOV/ 3,000,000 shares 1/22/2000 LYU/VUY/LVWMTC/VM/LCT/ 25,000 contracts 1/22/2000 VZV/LYCNKA/VOK/LOK 50,000 contracts 1/22/2000ORQ/VOR/LRO/OWQ 3,750,000 shares 1/22/2000 VZR/LRZ/WOUPEP/VP/LPP// 25,000 contracts 1/22/2000 VPR/LDVSCH/VYS/LWS 2,000,000 shares 1/22/2000 SYH/VZY/LWZSLB/VWY/LYS 50,000 contracts 1/22/2000SLM/VRM/LOS/SLZ/ 2,625,000 shares 1/22/2000 VZL/LYMSWY/VYW/LYW 40,000 contracts 1/22/2000TXN/VXT/LTN 50,000 contracts 1/22/2000UNG/CNC/VJS/LLG 4,775,000 shares 1/22/2000VSZ/WZY/VVX/HWP 32,500 contracts 1/22/2000WMB/VBB/LMB 21,000 contracts 1/22/2000MOB/VML/LML 50,000 contracts 2/19/2000ALL/LZL/ZZL 50,000 contracts 1/20/2001BEL/LEU/ZLE 50,000 contracts 1/20/2001

Class Limit Date

Position Limit Circulars

Position Limit Circular PL98-46

DATE: July 8, 1998

TO: Members and Member Organizations

FROM: Department of Market Regulation

RE: Equity Position and Exercise Limits

Please be reminded that the position and exercise limits1 for the following equity option classes will be decreased to a lower tier limit with the July,1998, expiration. Effective July 18, 1998, the position and exercise limits for the following equity option classes will be decreased to the applicablestandard limit as noted below:

Option Standard PositionUnderlying Stock Symbol and Exercise LimitAdvanta Corp. AVQ 10,500 contractsAmes Department Stores QAF 7,500 contractsApplix Inc. LQX 7,500 contractsArcadia Financial Ltd. AAC 7,500 contractsAuspex Systems Inc. AQX 7,500 contractsBattle Mountain Gold Co. BMG 10,500 contractsBiomet, Inc. BIQ 10,500 contractsBio Technology General Corp. QTG 10,500 contractsCircuit City Stores Carmax Group KMX 4,500 contractsConsolidated Freightways Corp. XQF 7,500 contractsDeutsche Telekom AG ADR DT 7,500 contractsFila Holdings SPA ADR FLH 7,500 contractsForte Software Inc. RQF 7,500 contractsGenzyme Corporation GZQ 20,000 contractsHarmonic Lightwaves Inc. LOQ 7,500 contractsIntervoice Inc. VQN 4,500 contractsNeiman Marcus Group Inc. NMG 4,500 contractsNCR Corp. NCR 10,500 contractsOryx Energy Co. ORX 10,500 contractsPrecision Response Corp. MQX 7,500 contractsRoslyn Bancorp. Inc. OQU 7,500 contractsSapiens International Corp. N.V. QHH 7,500 contractsScholastic Corporation NHQ 4,500 contractsSt. Jude Medical Inc. STJ 10,500 contractsTrizec Hahn Corporation TZH 7,500 contractsUltrak Inc. ULQ 4,500 contractsVerilink Corp. QWQ 7,500 contractsVolvo AB ADR VQY 7,500 contractsWisconsin Energy Corporation WEC 7,500 contractsZila, Inc. QWC 4,500 contracts

1Limits were previously reviewed in January 1998 and, at that time, these equity option classes were not eligible to remain at their current tier limit.


Copies of the complete list of the applicable limits for all Exchange listed options are available in the 2nd floor data information bins or may beobtained from the Department of Market Regulation. If you wish to receive regular updates of the position limit list via telefax, please contactCandice Nickrand at (312) 786-7730 in the Department of Market Regulation.


DATE: July 8, 1998



RE: Equity Position and Exercise Limits

Please be reminded that the adjusted position and exercise limits1 for the following equity option classes will expire with the July, 1998, expiration.Effective July 18, 1998, the position and exercise limits for the following equity option classes will revert to the applicable standard limit as notedbelow:

Underlying Option Standard PositionStock Symbol and Exercise LimitCasey’s General Stores, Inc. YQC 7,500 contractsCoca-Cola Femsa S.A. KOF 10,500 contractsEcolab, Inc. ECL 7,500 contractsEnzo Biochem, Inc. ENZ 4,500 contractsEpitope, Inc. QTP 4,500 contractsICG Communications, Inc. QIG 25,000 contractsMead Corp. MEA 10,500 contractsMolex, Inc. MOQ 10,500 contractsPeoplesoft Inc. PQO 25,000 contractsQuintiles Transnational Corp. QRT 20,000 contractsTCF Financial Corp. TCB 7,500 contractsTCI Ventures GRP-A VXQ 25,000 contracts

Copies of the complete list of the applicable limits for all Exchange listed options are available in the 2nd floor data information bins or may beobtained from the Department of Market Regulation. If you wish to receive regular updates of the position limit list via telefax, please contactCandice Nickrand at (312) 786-7730 in the Department of Market Regulation.

1Limits were previously adjusted due to a stock split, merger, stock distribution, stock dividend, etc.


DATE: July 2, 1998



RE: Equity Option Position and Exercise Limits

As a result of a review of trading statistics, the following classes now qualify for a higher position and exercise limit:

Option Class New Tier HQ 7,500 MRA 7,500 TLD 7,500 QXS 7,500 VIQ 7,500

GCN/GZZ 750,000 shares*

BOQ 10,500 EQP 10,500 ETN 10,500 HLR 10,500 HRP 10,500 IFF 10,500 IMQ 10,500 MAN 10,500

*Position reflected in shares due to a 3-for-2 Stock Split. After November 21, 1998, the position and exercise limit will revert to 7,500 contracts ofGCN.

For additional information, please contact Karen Charleston at (312) 786-7724 in the Department of Market Regulation.

MBK 10,500 QCI 10,500 QIE 10,500 QNC 10,500 SNC 10,500

BHQ 20,000 GMH 20,000 QGC 20,000 SLR 20,000 YVQ 20,000

ALA 25,000 AMP 25,000 NAQ 25,000 RTN 25,000 SYY 25,000

Option Class New Tier



DATE: July 2, 1998



RE: Equity Option Position and Exercise Limits

The position and exercise limits in the AccuStaff, Inc. (ASI), ELF Aquitaine ADS (ELF), Firstar Corp. (FSR), and Roberts Pharmaceuticals Corp. (RPC)classes of options were scheduled to be decreased after the July 1998 expiration. However, as a result of a review of trading statistics, it has beendetermined that RPC’s position and exercise limit will remain unchanged at 7,500 contracts, ELF and FSR’s position and exercise limits will remainunchanged at 10,500 contracts and ASI’s position and exercise limit will remain unchanged at 20,000 contracts.

For additional information, please contact Karen Charleston at (312) 786-7724 in the Department of Market Regulation.


DATE: July 2, 1998

TO: Members

RE: Green Tree Financial Corporation (“GNT/VSJ/LGN”) Merger with Marble Acquisition Corp.,a wholly-owned subsidiary of Conseco, Inc. (CNC)Effective Date July 1, 1998

The Exchange has established that the position and exercise limits following this merger will be any combination of UNG, VJS, L LG and CNC optioncontracts on the same side of the market not to exceed 4,775,000 shares of the underlying security through January 22, 2000. Following theJanuary 2000, expiration, the position and exercise limits will revert to the standard limit of 25,000 contracts of CNC.

For additional information, please contact Candice Nickrand at (312) 786-7730 in the Department of Market Regulation.

RESEARCH CIRCULARS

The following Research Circulars were distributed between June 29, 1998 and July 1, 1998 . If you wish to read the entire document, and have accessto a fax machine, please call the CBOE FaxLine at 1-800-OPTIONS, choose option “4” and then option “1”. Please have your fax number and thecorresponding FaxLine document number ready. The FaxLine number is listed adjacent to each circular. To receive a list of all available documents, usethe FaxLine number 000. You may also access the Research Circulars on our Web Site at http://www.cboe.com Questions regarding any of theinformation that is discussed in any Research Circular may be directed to the CBOE Investor Services Department at 1-800-OPTIONS.

CBOE Research Circular #RS98-342 FaxLine Document No. 873June 29, 1998Signature Resorts, Inc. (“OWN”) Name Change to: Sunterra CorporationEffective Date: July 1, 1998

CBOE Research Circular #RS98-343 FaxLine Document No. 874June 29, 1998Health and Retirement Properties Trust (“HRP”) Name Change to: HRPT Properties TrustEffective Date: July 1, 1998

CBOE Research Circular #RS98-344 FaxLine Document No. 875June 29, 1998First American Corporation (“FATN/EQJ”) Stock and Option Symbol Change to “FAM”Effective Date: July 1, 1998

CBOE Research Circular #RS98-345 FaxLine Document No. 876June 30, 1998The Walt Disney Company (“DIS/LWD/ZDS”) 3-for-1 Stock SplitEx-Distribution Date: July 10, 1998

CBOE Research Circular #RS98-346 FaxLine Document No. 872June 30, 1998Green Tree Financial Corporation (“GNT/VSJ/LGN”): COMPLETED Merger with Marble Acquisition Corp.

CBOE Research Circular #RS98-347 FaxLine Document No. 877July 1, 1998Signature Resorts, Inc. (“OWN”) Name Change to: Sunterra Corporation Delayed Until July 9, 1998


CBOE Research Circular #RS98-348 FaxLine Document No. 878July 1, 1998360E Communications Company (“XO”): COMPLETED Merger with Pinnacle Merger Sub, Inc.

CBOE Research Circular #RS98-350 FaxLine Document No. 879July 1, 1998Compania de Telecomunicaciones de Chile S.A. ADS (“CTC/LDT/ZDT & adj. CUC/LYZ and VXD”): Rights Expiration and PositionConsolidation

CBOE Research Circular #RS98-351 FaxLine Document No. 900July 1, 1998New LEAPS ® Listing: Platinum Technology, Inc. (“PLAT/FLQ”) — LJF & ZFL

RegulatoryBulletin

July 10, 1998 Volume RB9, Number 13

The Constitution and Rules of the Chicago Board Options Exchange, (Incorporated (“Ex-change”), in certain specific instances, require the Exchange to provide notice to themembership. The Regulatory Bulletin is delivered to all individual members and nomi-nees of member organizations twice a month to satisfy this requirement.

RegulatoryCirculars

Regulatory Circular RG98-67

Date: June 19, 1998

To: Members

From: Equity Floor Procedure CommitteeFloor Officials Committee

Re: Quarterly Closing Rotation on June 30, 1998

The Floor Officials Committee is hereby giving notice that pursuant to its authority underInterpretation .02 of Exchange Rule 6.2 to call a closing rotation in the interests of a fairand orderly market, a closing rotation will be held in all equity and narrow-basedindex options TUESDAY, June 30, 1998 .

Commencing at 3:02 P.M. (Chicago Time) or after a closing price of the stock in itsprimary market is established, whichever is later, a closing rotation will be held. Alloption orders must be received on the trading floor prior to the 3:02 P.M. close oftrading in order to participate in the closing rotation. However, the rotation may com-mence at or after the 3:02 P.M. closing depending on the establishment of a closing priceof the stock in its primary market.

Questions concerning the above may be directed to a member of the Floor OfficialsCommittee, to a member of the Equity Floor Procedure Committee, or to John Johnston,Vice President, Execution Services at 786-7303.

Previously printed in 6/24/98 Exchange Bulletin. (See Regulatory Circulars RG97-121and RG98-34).


To: Members

From: Department of Market Regulation

Re: Contrary Exercise Advice (CEA) Procedures

Date: June 22, 1998

This circular is to remind members that CBOE Rule 11.1 Interpretations and Policies .06requires that a Contrary Exercise Advice (CEA) be submitted any time a market-maker or

RB2RB2RB2RB2RB2 J J J J Julululululy 10,y 10,y 10,y 10,y 10, 1998, 1998, 1998, 1998, 1998, VVVVVolume RB9,olume RB9,olume RB9,olume RB9,olume RB9, Number 13 Number 13 Number 13 Number 13 Number 13

Regulatory Circularscontinued

clearing member, on behalf of its proprietary account or one of its customer accounts,exercises an “out-of-the-money” expiring equity option position or does not exercise an “in-the-money” expiring option position, as defined by OCC Rule 805.1 The clearing memberor market-maker must submit a CEA to the Exchange for all such exercises by 4:30 p.m.(CT) on Expiration Friday. It should be noted that this rule was adopted in conjunction withrules adopted by the NASD and other U.S. options Exchanges who are members of theIntermarket Surveillance Group.

KEY POINTS TO REMEMBER

• The exercise cut-off time for the submission of a CEA is 4:30 p.m. (CT) on ExpirationFriday.

• A CEA must be time stamped and submitted to one of the RED Advice drop boxes thatare located at the first floor CBOE trade match window and most market-maker clearingfirms.

• Members must submit separate instructions to their clearing firms to exercise contraryto OCC Rule 805 or not exercise an in-the-money expiring equity option.

• CEA’s for non-member customer accounts may be submitted directly to OCC via C/MACS before the 4:30 p.m. (CT) cutoff time.

For further information, please contact Patricia Cerny at (312) 786-7722 or KarenCharleston at (312) 786-7724 in the Department of Market Regulation.


Date: June 22, 1998

To: Members

From: Office of the Secretary

Re: E-Mail Bulletins

Beginning July 1, 1998, the Exchange Bulletin and the Regulatory Bulletin (“Bulletins”) willbe available either electronically via e-mail or in hardcopy via U.S. Mail or other means ofdelivery. Effective Members, who currently receive one copy of the Bulletins free-of-charge,must submit an Informed Consent to E-Mail Notice (attached) to the Membership Depart-ment in order to receive the Bulletins via e-mail. E-mail delivery to members who currentlyreceive e-mail under the pilot program will be discontinued on or about July 1, 1998, if aConsent is not on file with the Membership Department.

All members are encouraged to elect e-mail delivery. E-mail is a quick and effi-cient means of delivery and it reduces the Exchange’s printing and mailing ex-penses.

1 Expiring equity options that are 3/4 of a point or more in-the-money for customer accounts and 1/4 of a point or more forfirm or market-maker accounts are automatically exercised. Expiring options that are below those parameters will beexercised only if the OCC clearing member holding the position submits an “Exercise Notice” to OCC. In addition, noticemust be given to OCC to NOT exercise an in-the-money expiring equity option.

Regulatory Circular RG98-68 continued

J J J J Julululululy 10,y 10,y 10,y 10,y 10, 1998, 1998, 1998, 1998, 1998, VVVVVolume RB9,olume RB9,olume RB9,olume RB9,olume RB9, Number 13 Number 13 Number 13 Number 13 Number 13 RB3 RB3 RB3 RB3 RB3

Regulatory Circular RG98-69 continuedRegulatory Circularscontinued

Bulletins are available according to the following schedule:

Subscription FeeRecipient Delivery 7-1-98 to 6-30-99

Effective Members Hardcopy Delivery Free(In the case of aMember Organization, orthe Bulletins are sentto the Nominee or E-mail FreeRegistered-For)

Additional copies to Hardcopy Delivery $100Members, Subscriptionsfor Associated Persons E-mail Delivery $50and Non-Members

Members that wish to subscribe to additional copies of the Bulletins (and associatedpersons who wish to subscribe) must submit the appropriate subscription fee and theirname, mailing address, e-mail address and telephone number to:

Investor Services DepartmentChicago Board Options Exchange400 South LaSalleChicago, IL 60605

Any questions regarding Bulletin distribution may be directed to:

Carolyn Mitchell Nancy Nielsen Rae Pancake-TapiaInvestor Services Office of the Secretary Membership Department312-786-7201 312-786-7466 [email protected] [email protected] [email protected]

Informed Consentto

E-mail Notice

The Constitution and Rules of the Chicago Board Options Exchange, Incorporated (“Ex-change” or “CBOE”), in certain specific instances, require the Exchange to provide notice tothe membership. To satisfy this requirement, the Exchange publishes the weekly ExchangeBulletin and the bi-monthly Regulatory Bulletin (jointly “newsletters”). A list of the requirednotices that are currently published in the newsletters is set forth below. The Exchangeprovides a complimentary copy of each newsletter, via U.S. Mail or other means of delivery,to all individual members and all nominees and registered-fors of member organizations atthe address maintained on the books and records of the Exchange pursuant to CBOE Rule3.6(b).

The undersigned member hereby requests and consents to substitute receipt by electronicmail (“E-mail Notice”) for physical delivery of the hardcopy newsletters. The undersignedmember agrees that E-mail Notice constitutes full, valid and sufficient notice and service ofall Exchange notifications included in the newsletters, pursuant to Section 10.2 of theExchange’s Constitution.

CBOE encourages the undersigned to retain either a printed or electronic copy of each E-mail Notice for future reference. As an additional resource for members, CBOE is evaluatingretention of the newsletters for a minimum of 2 years on a password protected Members




Only Page on the CBOE Web Site (http://www.CBOE.com). CBOE will apprise the mem-bership when and if such Members Only Page becomes operational.

The undersigned further agrees to file with the Membership Department and keep currentan electronic mail address to which the E-mail Notice may be delivered and to hold theCBOE harmless from any and all liability incurred as a result of substituting receipt of E-mail Notice for physical delivery of the newsletters.

This consent will remain in effect until such time as the undersigned provides written noticeto the Membership Department to resume physical delivery of the newsletters.

E-mail Address: _________________________________________(Print Legibly)

_________________________________________(Print Name) (Acronym)

________________________________________Member Organization, if applicable

________________________________________(Sign)

If you receive the newsletters for more than one membership, please indicate the name ofeach membership for which you are electing E-mail Notice:

No. of Memberships: __________ _________________________________________Name

_________________________________________Name

Date:

Return this form to the Membership Department

Following is a summary of the primary types of notices that are currently published in theExchange Bulletin or the Regulatory Bulletin pursuant to the Constitution and Rules. Theabove consent will apply to any new notice requirement that the CBOE elects to fulfill byincluding information in the newsletters.

Constitution §12.2, “Rules”, requires the Exchange to serve notice toeach member promptly upon the adoption of an amendment to the Rules.(Regulatory Bulletin)

Rule 3.9, “Application Procedures and Approval or Disapproval”, requiresthe Membership Department to publish the name of an applicant for mem-bership in the Exchange Bulletin and to post the name on the ExchangeBulletin Board. (Exchange Bulletin)

Rule 3.11, “Notice of Membership Effectiveness”, requires the Member-ship Department to promptly mail a notice of each membership that be-comes effective to all members and to post a copy of the notice on thebulletin board of the Exchange. (Exchange Bulletin)




Rule 3.15, “Proceeds from Sale of Membership” requires the Exchange topost notice of the sale of a membership in the Exchange Bulletin and onthe Exchange bulletin board(s). Certain types of claims may be filed withthe Membership Department within 20 days from the date of the ExchangeBulletin. (Exchange Bulletin)

Rule 3.16(a), “Surrender of Memberships”, requires the Exchange to mail anotice of the termination of a nontransferable membership (Board of TradeExerciser) and to post such notice on the bulletin board of the Exchange.(Exchange Bulletin)

Rule 3.16(b), “Leased Memberships”, requires the Exchange to post no-tice of the lease of a regular membership and the reversion of a previouslyleased membership to a lessor in the Exchange Bulletin and on the Ex-change bulletin board(s). Certain types of claims may be filed with theMembership Department within 20 days from the date of the ExchangeBulletin. (Exchange Bulletin)

Rule 3.14, “Sale and Transfer of Memberships”, requires the MembershipDepartment to post the lowest written offer of sale of a regular membership(with the earliest submission date) on the Exchange Bulletin board. (Ex-change Bulletin)

Rule 3.27, “Membership Options Trading Permits”, subjects the lease, saleor transfer of an Option Trading Permit to the same posting requirementsas the lease, sale or transfer of a regular CBOE membership. (ExchangeBulletin)

Interpretation .02 to Rule 8.9, “Securities Accounts and Orders of Market-Makers”, requires the Exchange to mail to all Exchange members a noticeof the Membership Department’s determination not to disapprove a jointaccount application.

Rule 17.9, “Decision”, requires the Exchange to publish a summary of allfinal disciplinary decisions. (Regulatory Bulletin)

In addition to the above notices, current Exchange policy provides that thenewsletters contain, among other things:

Notice of each new equity position limit fixed by the Exchange pursuant toRule 4.11. (Exchange Bulletin)

A listing of all Research Circulars issued by the Exchange. (ExchangeBulletin)

All Regulatory Circulars issued by the Exchange. (Regulatory Bulletin)

A summary of all arbitration Awards issued pursuant to Exchange Rule18.31. (Regulatory Bulletin)

A summary of final Appeals Committee Decisions and any Board of Direc-tors decision relating to the appeal. This policy is only applicable to ap-peals that are filed on or after June 15, 1998. (Regulatory Bulletin)

(6/98)



1 The Council currently consists of 19 members, 13 of which are representatives of securities firms. The SRO councilmembers are the AMEX, CBOE, MSRB, NASD, NYSE and PHLX. The SEC and state representation of NASAA areadvisors to the Council.


To: Members and Member Organizations

From: Regulatory Services Division

Date: June 23, 1998

Re: Changes to Rule 9.3 A, Continuing Education for Registered Persons

On March 3, 1998, the Securities and Exchange Commission (“SEC”) approved changesto the Continuing Education Rules of the Chicago Board Options Exchange and other self-regulatory organizations (“SROs”),( see SEC Release No. 34-39712; File No. SR-CBOE-97-68). The changes to the rule supports the recommendations of the Securities Industry/Regulatory Council.1 The changes to Rule 9.3A, Continuing Education for RegisteredPersons, strengthens the continuing education requirements for registered persons, andimplements a new program designed for registered principals. The effective date of thechanges is July 1, 1998. This new program designed specifically for registered principalswill be implemented in the near future. Prior notice will be provided to members andmember organizations of the actual start date of the principal program. Principals willcontinue to take the current Regulatory Element program until implementation of the newprincipals program.

A summary of the changes to the rule are as follows:

• Development of a new Regulatory Element related to the specific needs of registeredprincipals. Individuals delegated supervisory responsibility or authority pursuant to Ex-change Rule 9.8, Supervision of Accounts, must participate in the Regulatory Element.

• Registered persons will no longer graduate from the Continuing Education Program aftertheir 10th anniversaries in the business. Registered persons will be required to partici-pate in the appropriate Regulatory Element on the second anniversary of their initialsecurities registrations, as defined by the rule, and every three years thereafter throughout their careers.

• There will be a one-time grandfather provision from the Regulatory Element for thosepersons registered for 10 years or more in their respective registration as of July 1, 1998.

• Members and Member firms are required to specifically focus on supervisory needs inconducting their annual analysis of training needs, and if it is determined that there is aspecific need for supervisory training for registered principals, it must be addressed inthe Firm Element training plan.

Questions concerning these changes may be directed to Lawrence J. Bresnahan, VicePresident, Financial and Sales Practice Compliance at (312) 786-7713 or Emily Schmitz,Manager of Registration, at (312) 786-7056. A copy of the rule change may be obtainedfrom the Legal Department by contacting the General Counsel’s office at (312) 786-7462.




To: Members

From: Membership Committee

Re: Trading by Nominees and Persons Who HaveRegistered Their Memberships for Member Organizations

Date: June 24, 1998

The Exchange recently has received some questions from members concerning CBOE Rule3.8 and how its provisions apply to trading by nominees and persons who have registeredtheir memberships for member organizations. In response to these questions, the Ex-change has filed a rule filing to clarify these provisions, and the Membership Committee isissuing this explanatory circular concerning these provisions.

Requirements of Rule 3.8(a)(4)(B)

Rule 3.8(a)(4)(B) provides that a nominee may perform floor functions only on behalf of themember organization for which the nominee is authorized.

Accordingly, unless one of the exceptions to Rule 3.8(a)(4)(B) described below is applicable,a nominee may not perform floor functions on the nominee’s own behalf or on behalf of amember organization other than the member organization for which the nominee is regis-tered with the Exchange. This means that a nominee may not act as an independentMarket-Maker and/or as an independent Floor Broker. This also means that a nominee mustreceive his or her compensation from, must be supervised by, and must report to the mem-ber organization for which the nominee is registered with the Exchange (and not any othermember organization).

However, Rule 3.8(a)(4)(B) does not preclude a nominee floor broker from representing ordersthat are placed with the nominee’s member organization by another member organization,provided that (i) there is an arms length customer relationship between the member organi-zation that placed the orders and the nominee’s member organization and (ii) the nomineecontinues to receive his or her compensation from, be supervised by, and report to themember organization for which the nominee is registered with the Exchange.

Exceptions to Rule 3.8(a)(4)(B)

There are only two exceptions to Rule 3.8(a)(4)(B).

The first exception to Rule 3.8(a)(4)(B) is that, under Rule 3.8(a)(4)(C), a nominee may tradeas an independent Market-Maker and/or as an independent Floor Broker if the following 3requirements are satisfied: (i) the nominee is a registered broker-dealer, (ii) the nominee hasthe prior written approval of the nominee’s member organization to trade as an independentMarket-Maker and/or as an independent Floor Broker, and (iii) the nominee has the priorwritten approval of the Exchange to trade as an independent Market-Maker and/or as anindependent Floor Broker.

In addition, it should be noted that Rule 3.8(a)(2) requires a nominee’s member organizationto guaranty all obligations arising out of the nominee’s representation of the member organi-zation and that this guaranty also applies to transactions of the nominee as an independentMarket-Maker and/or Floor Broker as authorized pursuant to Rule 3.8(a)(4)(C).

Application forms for use by nominees to request approval under Rule 3.8(a)(4)(C) to trade asan independent Market-Maker and/or as an independent Floor Broker are available from, andmust be filed with, the Membership Department. A nominee’s member organization is




required to designate on the application form whether the organization is authorizing thenominee to trade under Rule 3.8(a)(4)(C) as (i) solely an independent Market-Maker, (ii)solely an independent Floor Broker, or (iii) both an independent Market-Maker and anindependent Floor Broker. Similarly, the Exchange will include in any Exchange approvalgranted under Rule 3.8(a)(4)(C) a designation of which of these capacities the Exchangehas approved.

However, notwithstanding any Exchange approval granted under Rule 3.8(a)(4)(C), CBOERule 8.8 generally provides that a member may not act as an independent Market-Makerand as an independent Floor Broker in the same trading station on the same business day.

The second exception to Rule 3.8(a)(4)(B) is that the MTS Appointments Committee mayapprove a member to act on behalf of a DPM, in its capacity as a DPM, pursuant to Rule8.80.

Persons Who Have Registered Their Memberships for Member Organizations

The provisions of Rule 3.8(a)(4)(B) and of Rule 3.8(a)(4)(C) which are applicable to nomi-nees are also applicable to persons who have registered their memberships for memberorganizations (since, under Section 2.4 of the CBOE Constitution, such a person repre-sents a member organization in lieu of a nominee). Thus, a person who has registered hisor her membership for a member organization is also required to comply with the provisionsof Rule 3.8(a)(4)(B) and Rule 3.8(a)(4)(C) to the same extent that a nominee is required tocomply with those provisions.

Any questions regarding this circular may be directed to RaeDell Pancake of the Member-ship Department at (312) 786-7460 or to Patricia Cerny of the Department of Market Regu-lation at (312) 786-7722.


Date: June 26, 1998

To: Members and Member Firms

From: Modified Trading System (MTS) Appointments Committee

Re: Options on Samsonite Corporation (QDS)

The Modified Trading System (MTS) Appointments Committee (the “Committee”) has con-tinued to monitor the trading characteristics of the stock and options on Samsonite Corpo-ration (“QDS”). Based upon its review, the Committee has determined that as of the open-ing on Friday, June 26, 1998, the exemption to the provision of Rule 8.7 pertaining to themaximum allowable bid/ask spread which was temporarily granted pursuant to ExchangeRule 8.7(b)(iv), will no longer be effective (see Regulatory Circular #RG98-54). As of theopening on June 26, 1998, all QDS options will trade according to the provisions of Ex-change Rule 8.7(b)(iv).

Additionally, the Committee, by the authority under Rule 8.51, has determined that thewaiving of the “Firm Quote Rule” in QDS options will no longer be effective as of the openingon June 26, 1998.

Questions regarding this memorandum may be directed to Daniel Hustad at (312) 786-7715.


Rule Changes,Interpretations andPolicies continued


Date: June 29, 1998

To: Members

From: Index Floor Procedure CommitteeSPX Floor Procedure CommitteeFloor Officials Committee

Re: Quarterly Closing Rotation on June 30, 1998

The Floor Officials Committee is hereby giving notice that pursuant to its authority underInterpretation .02 of Exchange Rule 6.2 to call a closing rotation in the interests of a fair andorderly market, a closing rotation will be held in all broad-based index options TUES-DAY, June 30, 1998 .

Commencing at 3:15 P.M. (Chicago Time) a closing rotation will be held. All option ordersmust be received on the trading floor prior to the 3:15 P.M. close of trading in order toparticipate in the closing rotation.

Questions concerning the above may be directed to any member of the Floor Officials Com-mittee, Index Floor Procedure Committee, SPX Floor Procedure Committee or to JohnJohnston, Vice President, Execution Services at 786-7303.

Rule Changes,Interpretationsand Policies

APPROVED RULE CHANGE(S)The Securities and Exchange Commission (“SEC”) has approved the following change(s) toExchange Rules pursuant to Section 19(b) of the Securities Exchange Act of 1934, asamended (“the Act”). Copies are available from the Legal Department.

The effective date of the rule change is the date of approval unless otherwise noted.

SR-CBOE-97-41 — Stop Orders

On June 23, 1998, the SEC approved Rule Change File No. SR-CBOE-97-41 which amendsthe definition of a stop order in Rule 6.53(c)(iii) to clarify that a stop order becomes triggeredwhen the option contract reaches a specified price “on the CBOE floor.” (Securities Ex-change Act Release No. 40111, 63 FR 35629 (June 30, 1998))

A stop order is defined as a contingency order to buy or sell when the market for a particularoption contract reaches a specified price. Previously, the rule did not specify, but wasinterpreted to mean, that the contingency to buy or sell is satisfied when the option contracttrades or is bid at or above the stop price (in the case of a buy order) or trades or is offered ator below the stop price (in the case of a sell order) “on the floor of the CBOE.” The amend-ment makes it clear that a stop order is not activated when the bid or offer (as appropriate)reaches the stop limit on another exchange.

Any questions regarding the amendment may be directed to Stephanie Mullins, Legal De-partment, at 312-786-7433. The text of the amendment to paragraph (c)(iii) of Rule 6.53 isset forth below. New language is italicized.

Rule 6.53(c)(iii) Stop (stop-loss) order

A stop order is a contingency order to buy or sell when the market for a particularoption contract reaches a specified price on the CBOE floor. A stop order to buybecomes a market order when the option contract trades or is bid at or above thestop price on the CBOE floor. A stop order to sell becomes a market order whenthe option contract trades or is offered at or below the stop-limit price on the CBOEfloor.



SR-CBOE-98-13 – RAES in Equity Options

On June 16, 1998, the SEC approved Rule Change File No. SR-CBOE-98-13, which amendsRule 6.8 and Interpretation and Policy .02 thereunder to provide added flexibility to RAES inthe circumstance where the best bid or offer on the Exchange for a given equity option isinferior to the best bid or offer for the same option in another market where the option istraded. (Securities Exchange Act Release No. 40096, 63 FR 34209 (June 23, 1998)) Therule change provides for the automatic execution of eligible retail orders to buy or sell equityoptions at a price that may be one tick better than the best price currently quoted on theExchange if the better price is then being quoted in another market where the same optionsare traded. Members are referred to Regulatory Circular RG98-60, printed in the June 24,1998 issue of the Regulatory Bulletin, regarding “RAES Automatic Step-Up to NationalBest Quote”.

In addition, the rule change authorizes the Chairman of the appropriate Floor ProcedureCommittee, or his designee, to disable RAES Auto-Step-Up for specified classes or seriesof options or in respect of specified markets when such action is deemed to be warrantedby circumstances or conditions applicable to such options or markets. This authoritywould be expected to be exercised in circumstances such as communication or systemproblems, fast markets, and similar situations that make quotes unreliable.

Any questions regarding the rule change may be directed to Tim Thompson, Legal Depart-ment, at 312-786-7070. The full text of the rule change is set forth below. New language isitalicized.

Rule 6.8 RAES Operations in Equity Options

(a) (i) Firms on the Exchange’s Order Routing System (“ORS”) will automaticallybe on the Exchange’s Retail Automatic Execution System (“RAES”) for purposesof routing small public customer market or marketable limit orders into the RAESsystem. Such orders are those as defined in Rule 7.4(a) regarding placing oforders on the public customer book. The appropriate Floor Procedure Committee(“FPC”) shall determine the size of orders eligible for entry into RAES. For pur-poses of determining what a small customer order is, a customer’s order cannotbe split up such that its parts are eligible for entry into RAES. Firms on ORS havethe ability to go on and off ORS at will. Firms not on ORS that wish to participatewill be given access to RAES from terminals at their booths on the floor.

(ii) When RAES receives an order, the system automatically will attach to theorder its execution price, determined by the prevailing market quote at the time ofthe order’s entry to the system, except as otherwise provided in Interpretation andPolicy .02 under this Rule 6.8. A buy order will pay the offer; a sell order will sell atthe bid. A participating Market-Maker will be designated as contra-broker on thetrade. A trade executed on RAES at an erroneous quote should be treated as atrade reported at an erroneous price and adjusted to reflect the accurate marketafter receiving a Floor Official’s approval.

(iii) This rule shall apply to RAES in classes handled by DPM’s except that theMTS Appointments Committee may make available additional series or raise thesize of eligible orders in a DPM’s classes pursuant to Rule 8.80.

(b) It is possible that the prevailing market bid or offer may be equal to the best bidor offer on the Exchange’s book. In those instances, a RAES order cannot beexecuted at a price where the best bid or offer on the book equals the prevailingmarket. A RAES sell order never can be filled at a price lower than the best bookbid, nor can a RAES buy order be filled at a price higher than the best book offer.However, in the case of options on IBM, and in the case of unusual market condi-tions for other option classes, as determined by the Exchange’s Vice Chairman



SR-CBOE-98-13 continued

and Chairman of the appropriate Market Performance Committee (“MPC”), a trans-action can take place at the price of the best bid or offer reflected by a booked order.

(c) Under ordinary circumstances, in options classes other than IBM, if a RAESorder would be executed at the price of one or more booked orders, the order will bererouted on ORS under the existing ORS parameters. Currently, such an orderwould be routed to a Floor Broker in the crowd via a printer, as determined upon thevolume parameters of each firm. In the event that the firm routing the order is notrouting orders to the printer in that crowd, the order would print at the firm’s booth.The representation, execution and reporting of such an order would occur as it doesfor all orders so routed.

(d) (i) Participating Market–Makers will be assigned by RAES on a rotating basis,with the first Market–Maker selected at random from the list of signed–on Market–Makers. Participating Market–Makers are obligated to trade at the displayed mar-ket quote at the time an order enters the system. Exchange rules shall not apply tothe extent that they are inconsistent with these terms, including but not limited toRule 6.45 (Priority of Bids and Offers), Rule 6.43 (Manner of Bidding and Offering),and Rule 8.1 (Market–Maker Defined). Position and exercise limits will remain ineffect for RAES transactions. Transactions executed through RAES orders will counttowards fulfillment of the in–person requirement of Rule 8.7.

(ii) All participants will be informed of trades immediately upon execution. A fillreport may be generated to the firm at the firm’s point of entry into the system (i.e.,either its branch office or floor booth). A trade acknowledgement ticket (“TAT”) will beprinted at locations in trading posts where selected options classes are located, fordelivery to Market–Makers. TAT’s for Market–Makers not present at the trading postwill be set aside for pickup. The Exchange may make available an electronicallytransmitted TAT in lieu of a printed TAT. A log for all transactions will be availablethroughout the day for review by participants. Audit reports will be sent to theExchange’s Regulatory Services Division. The Exchange may provide electronicreporting of trades to participating Market–Makers in lieu of hard copy TAT’s.

(e) Eligible orders must be market or marketable limit orders for twenty or fewercontracts on series placed on the system. The appropriate FPC, in its discretion,may determine to restrict eligible orders, including but not limited to, lowering con-tract limits. Announcements concerning the size and kind of eligible orders will bemade as these are adjusted. The appropriate FPC will have discretion to place onthe system such series in classes of options as it determines is appropriate. An-nouncements concerning eligible series will be made daily by the Exchange in thesame way new strike prices are currently announced (i.e., by memoranda or tapedtelephone messages).

(f) Each day the system is available, a post director or his representative will startthe system, after quotes in the eligible series have been updated following openingrotation. If the system is or becomes unavailable, for any reason, eligible orders willbe handled as they are handled currently in non–eligible equity option series.

(g) A marketable limit order is a limit order where the specified price at which to sellis below or at the current bid, or if to buy is above or at the current offer. Marketablelimit orders will not be executed to sell for less or buy for more than the specifiedprice, but the order can be executed to sell for a higher price or buy for a lower price.However, if the order’s limit price is under $3, RAES will execute the order only if thenecessary bid or offer is 1/2 point or less from the limit price. If the order’s limit priceis $3 or more, RAES will execute the order only if the necessary bid or offer is onedollar or less from the limit price.




. . . Interpretations and Policies

.01 Notwithstanding the provisions of paragraph (e) of this Rule, the appropriateFPC may increase the size or orders in one or more classes of multiply–tradedequity options eligible for entry into RAES to the extent necessary to match thesize of orders in options of the same class or classes eligible for entry into theautomated execution system of any other options exchange, provided that theeffectiveness of any such increase shall be conditioned upon its having been filedwith the Securities and Exchange Commission pursuant to Section 19(b)(3)(A) ofthe Securities Exchange Act of 1934.

.02 Orders to buy or sell equity options that are multiply traded in one or moremarkets in addition to the Exchange will not be automatically executed on RAESat prices inferior to the current best bid or offer in any other market, as such bestbids or offers are identified in RAES. In respect of those classes of options thathave been specifically designated by the appropriate Floor Procedure Committeeas coming within the scope of this sentence (“automatic step-up classes”), undercircumstances where the Exchange’s best bid or offer is inferior to the currentbest bid or offer in another market by no more than the minimum increment foroptions of that series established pursuant to Rule 6.42, such orders will be auto-matically executed on RAES at the current best bid or offer in the other market.In respect of automatic step-up classes of equity options under circumstanceswhere the Exchange’s best bid or offer is inferior to the current best bid or offer inanother market by more than the minimum increment for options of that seriesestablished pursuant to Rule 6.42, or in respect of specified automatic step-upclasses or series of options or specified markets under circumstances where theChairman of the appropriate Floor Procedure Committee or his designee has de-termined that automatic step-up should not apply because quotes in such optionsor markets are deemed not to be reliable, or in respect of classes of equity op-tions other than automatic step-up classes where the Exchange’s best bid or offeris inferior to the current best bid or offer in another market by any amount, suchorders will be rerouted to the DPM or OBO for that class of options for non-auto-mated handling. The DPM or OBO will report the execution or non-execution ofsuch orders to the firm that originally forwarded the order to RAES. The proce-dures described in the Interpretation .02 shall not apply in circumstances where a“fast market” in the equity options that are the subject of the orders in question hasbeen declared on the Exchange or where comparable conditions exist in the othermarket such that firm quote requirements do not apply.

SR-CBOE-98-17 – Narrow-Based Index Warrants

On June 12, 1998, the SEC approved Rule Change File No. SR-CBOE-98-17, which autho-rizes the Exchange to list and trade warrants linked to an index consisting of between 15and 20 actively traded stocks. (Securities Exchange Act Release No. 40085, 63 FR33742 (June 19, 1998)) Any questions regarding the rule change may be addressed toJoseph Levin, Vice President, Research, at (312) 786-7143. Copies of the filing are avail-able from the Legal Department.

SR-CBOE-98-28 – E-Mail Bulletin

Pursuant to Section 19(b)(3) of the Securities Exchange Act, Rule Change File No. SR-CBOE-98-28 became effective upon filing with the SEC, June 22, 1998. Beginning July 1,1998, the filing amends the subscription fee structure for members and non-membersreceiving the Exchange Bulletin by adding a fee for the option of obtaining the Bulletin via e-mail.




(See Regulatory Circular RG98-69, printed above.) A copy of the filing is available from theLegal Department.

One hardcopy of the Bulletin is provided free of charge to all effective members. Eachadditional copy is $100. For non-members, the Bulletin subscription fee is $100 for eachhardcopy. Both members and non-members may subscribe to the Bulletin via e-mail overthe Internet. A member’s first copy (whether hardcopy or via e-mail) is free of charge andeach additional copy via e-mail delivery is $50. The fee to non-members for e-mail deliverywill be $50 for each copy.

Any questions regarding e-mail Bulletins may be directed to Carolyn Mitchell, Investor Ser-vices, at 312-786-7201 or Nancy Nielsen, Legal Department, at 312-786-7466.

SR-CBOE-98-31 – Exchange Fees

Pursuant to Section 19(b)(3) of the Securities Exchange Act, Rule Change File No. SR-CBOE-98-31 became effective upon filing with the SEC, June 30, 1998. The rule changemakes certain fee changes and additions, and renews and amends (i) the Exchange’s Pro-spective Fee Reduction Program; and (ii) its Customer “Large” Trade Discount Program.The fee changes are being implemented by the Exchange pursuant to CBOE Rule 2.22 andwill take effect on July 1, 1998.

Any questions regarding the fee changes may be directed to Don Patton, Accounting De-partment, at 312-786-7026. A copy of the filing is available from the Legal Department.

PROPOSED RULE CHANGE(S)

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, as amended (“theAct”), and Rule 19b-4 thereunder, the Exchange has filed the following proposed rule change(s)with the Securities and Exchange Commission (“SEC”). A copy of the rule change filing(s)is available from the Legal Department. Members may submit written comments to theLegal Department.

The effective date of a proposed rule change will be the date of approval by the SEC, unlessotherwise noted.

SR-CBOE-98-29 – 2 ½ Point Strike Price Pilot

On June 26, 1998, the Exchange filed Rule Change File No. SR-CBOE-98-29, which seekspermanent approval of the 2-½ point strike price pilot program. In addition, the Exchange, inconjunction with the other options exchanges, seeks to add 20 allowable classes to theprogram each quarter for the next five calendar quarters. The new classes will be dividedaccording to an agreement between the options exchanges.

Any questions regarding the proposed rule change may be directed to Tim Thompson, LegalDepartment, at 312-786-7070. The text of the proposed amendments to Interpretation .05 toRule 5.5 is set forth below. Underlining indicates proposed new language; strikethroughindicates proposed deletions.




Rule 5.5 Series of Option Contracts Open for Trading

Interpretation .05

Until July 17, 1998, the The four options exchanges may select up to 100 100options classes on individual stocks for which the interval of strike prices will be$2.50 where the strike price is greater than $25 but less than $50. In addition,starting in the third calendar quarter of 1998, the four options exchanges may addtwenty new classes to this program for each of the next five calendar quarters,such that at the end of the period the Exchanges will be able to select up to 200classes to participate in the program. The 100 100 options classes and the 20classes added each quarter may be selected by the various options exchangespursuant to any agreement mutually agreed to by the individual exchanges. Inaddition to those options selected by the Exchange, the strike price interval maybe $2.50 in any multiply-traded option once another exchange trading that optionselects such option, as part of this pilot program. The CBOE and any of the otherexchanges may also list strike prices of $2.50 on any option class that wasselected by the NYSE pursuant to this pilot program.

SR-CBOE-98-30 – CBOE Telebras Index

On June 29, 1998, the Exchange filed Rule Change File No. SR-CBOE-98-30, which pro-poses to trade options on an index consisting of the American Depository Receipts of thetwelve companies that will be formed from the breakup of Telecomunicacoes BrasileirasS.A. Any questions with regard to the index may be directed to Joseph Levin, Vice Presi-dent, Research, at (312) 786-7143. Copies of the filing are available from the Legal Depart-ment.

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