MF Global Direct

Q & A

1. How long has the CBOT offered trading in precious metals?
The CBOT has supported precious metals trading since the 1960s.

2. What is meant by full or mini-sized contracts?
Full-size Gold is 100 ounces and mini-sized Gold is 33.2 ounces
Full-size Silver is 5,000 ounces and mini-sized Silver is 1,000 ounces

3. What is the tick size for CBOT Gold futures contracts?
10 cents per troy ounce for Gold
($10 per contract for the full-sized 100 ounce Gold futures)
($3.32 per contract for the mini-sized 33.2 ounce Gold futures)

4. What is the price basis for CBOT Gold futures?
All prices of Gold futures shall be basis New York, New York or basis any other location designated by the Exchange, in multiples of $0.10 (10 cents) per fine troy ounce.

5. Are the CBOT Metals physical delivery or cash settled futures contracts?
All of the CBOT precious metals contracts are physical delivery contracts involving vault receipts.

6. What vaults are regular for delivery on CBOT precious metals?
HSBC Bank USA and Delaware Depository Service are currently regular for delivery. The CBOT is pursuing additional delivery vaults.

7. Are the CBOT mini-sized precious metal futures contracts fungible with the new CBOT full-sized precious metals contracts?
The CBOT contracts are not fungible given that the contracts are physically delivered.

8. What is meant by market transparency?
It is the trader's ability to see the market: bids, offers and quantities. Traders on the CBOT electronic platform can see the entire market book. Customers can also view the live metals market book for free on the CBOT website - www.cbot.com/metals.

9. What is meant by the CBOT 100% electronic precious metals marketplace?
There is one continuous 21-hour electronic trading session for CBOT Gold and Silver futures. Trading begins at 7:16 p.m. (Central Time) and ends at 4:00 p.m. (Central Time), Sunday through Friday.

10. What is the matching algorithm that will be used for CBOT precious Metals contracts on the CBOT electronic trading platform?
The precious metals futures contracts will use a pro rata priority order matching algorithm with a maximum volume cap of 100 contracts. Priority is given to the first order at the best price for a maximum of 100 contracts. Once the volume cap of 100 contracts has been reached, the algorithm distributes any unassigned volume in a pro rata manner. For example, given these Nov 2004 orders in the CBOT Gold futures book:

Trader 1:
Sell 150 contracts @ $385.00
Time stamp on order entered 10:01 a.m. (Priority order)

Trader 2:
Sell 50 contracts @ $385.00
Time stamp on order entered 10:02 a.m.

Trader 3:
Sell 100 contracts @ $385.00
Time stamp on order entered 10:03 a.m.

Since Trader 1 has made the new best price, this order receives priority and will have the initial 100 contracts filled first based on an incoming buy order. If a new buy order for 200 contracts at $385.00 comes into the market at 10:04 a.m., the algorithm will allocate the contracts as follows among Trader 1, 2, and 3:

Trader 1 Sells a total of 125 contracts @ $385.00 (100 priority + 25 pro-rata)

Trader 2 Sells 25 contracts @ $385.00

Trader 3 Sells 50 contracts @ $385.00

The pro rata priority algorithm allocates incoming order flow to the order that was first at the best price and distributes remaining volume on a percentage basis to orders at the remaining bid/offer.

This algorithm encourages tighter markets and creates broader participation.

11. What are the market hours for the CBOT precious Metals contracts?
All of the CBOT precious Metals will be offered from 7:16 p.m. to 4:00 p.m. (Central Time), Sunday through Friday.

12. What are the CBOT ticker symbols for the CBOT precious Metals contracts?
ZG for the full-sized 100 ounce Gold futures
YG for the mini-sized 33.2 ounce Gold futures
ZI for the full-sized 5,000 ounce Silver futures
YI for the mini-sized 1,000 ounce Silver futures

13. What contract months will be available for trading the 100 ounce Gold futures on launch day - October 6, 2004?
Dec04, Feb05, Apr05, Jun05, Aug05, Oct05, Dec05, Feb06, Apr06, Jun06, Aug06, Oct06, Dec06, Jun07, Dec07, Jun08, Dec08, Jun09

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