NYBOT To Open New Alternative Investment Market

July 12, 2001 (PLANSPONSOR.com) - In a move it hopes will garner the attention of pension fund managers, the New York Board of Trade is gearing up to open an alternative investment market.

The NYBOT says the investment market for trading futures and options contracts based on the Commercial Markets Index (CMI) should open for business in the fall of this year

“The CMI contracts represent an important milestone for the NYBOT,” according to Mark D. Fichtel, President and CEO of NYBOT. “In terms of innovation, the CMI will allow NYBOT to become the industry’s first futures exchange market to offer investors the opportunity to trade based on an alternative investment index. We believe that derivative contracts on investable alternative instruments will provide a cornerstone for sophisticated investment in the coming decade.”

Future Option

The CMI tracks the returns of a portfolio of 25 commercial US futures markets, and uses an algorithm to calculate when to buy or sell in each market, depending on whether the current price is higher or lower than a 30 year historical average.

Introduced in 1998, the CMI was developed and maintained by AssetSight, Inc., it comprises currencies, government debt instruments and a range of traditional commodities. According to the company, the CMI captures price momentum by means of a trend-following process with a moving-average trigger.

CMI-based futures and options will provide investors with a hedging tool and a proxy for asset allocation that increases investment flexibility

More about the design and construction of the CMI at www.AssetSight.com