TO:	ALL CLEARING PARTICIPANTS
FROM:	CLIENT SERVICES AND SUPPORT
DATE:	December 5, 2007
SUBJECT:	USFE Binary Options

The US Futures Exchange, (USFE), an all electronic exchange, will launch the following Binary Option weekly contracts. Contract specifications and trading information are detailed below.

Binary Option Euro
Exchange Code	03
Commodity Code	PE
Underlying:	Euro
Quotation:	Probability Points
Contract Size:	$1000.00
Maximum Contract Price	100.0
Minimum Contract Price	00.0
Minimum Tick Size:	0.1
Outright Tick Value:	$1.00
Reportable Position	25 Contracts
Position Limit	400 Contracts
Strike Increments	A minimum of nine call strikes based on end of week at the money value. Strikes to be added as necessary. Strike increment of 50 pips (.0050)
Daily Settlement Price	Based on trading conditions at close.
Final Settlement Time:	Noon Chicago Time on the last trading day
Final Settlement	Cash Settled; If the option is deemed in the money given its strike price, the option will cash settle at $1000.00. If not, it will cash settle at $0.00. Refer to exchange rules for determination of final settlement.

Binary Option Australian Dollar
Exchange Code	03
Commodity Code	PD
Underlying:	Australian Dollar
Quotation:	Probability Points
Contract Size:	$1000.00
Maximum Contract Price	100.0
Minimum Contract Price	00.0
Minimum Tick Size:	0.1
Outright Tick Value:	$1.00
Reportable Position	25 Contracts
Position Limit	400 Contracts
Strike Increments	A minimum of nine call strikes based on end of week at the money value. Strikes to be added as necessary. Strike increment of 50 pips (.0050)
Daily Settlement Price	Based on trading conditions at close.
Final Settlement Time:	Noon Chicago Time on the last trading day
Final Settlement	Cash Settled; If the option is deemed in the money given its strike price, the option will cash settle at $1000.00. If not, it will cash settle at $0.00. Refer to exchange rules for determination of final settlement.

Binary Option Japanese Yen
Exchange Code	03
Commodity Code	PY
Underlying:	Japanese Yen
Quotation:	Probability Points
Contract Size:	$1000.00
Maximum Contract Price	100.0
Minimum Contract Price	00.0
Minimum Tick Size:	0.1
Outright Tick Value:	$1.00
Reportable Position	25 Contracts
Position Limit	400 Contracts
Strike Increments	A minimum of nine call strikes based on end of week at the money value. Strikes to be added as necessary. Strike increment of 50 pips (.0050)
Daily Settlement Price	Based on trading conditions at close.
Final Settlement Time:	Noon Chicago Time on the last trading day
Final Settlement	Cash Settled; If the option is deemed in the money given its strike price, the option will cash settle at $1000.00. If not, it will cash settle at $0.00. Refer to exchange rules for determination of final settlement.

Binary Option Silver
Exchange Code	03
Commodity Code	PS
Underlying:	Silver
Quotation:	Probability Points
Contract Size:	$1000.00
Maximum Contract Price	100.0
Minimum Contract Price	00.0
Minimum Tick Size:	0.1
Outright Tick Value:	$1.00
Reportable Position	25 Contracts
Position Limit	400 Contracts
Strike Increments	A minimum of nine call strikes based on end of week at the money value. Strikes to be added as necessary. Strike increment of $0.25.
Daily Settlement Price	Based on trading conditions at close.
Final Settlement Time	12:45 p.m. Chicago time on the last trading day.
Final Settlement	Cash Settled; If the option is deemed in the money given its strike price, the option will cash settle at $1000.00. If not, it will cash settle at $0.00. Refer to exchange rules for determination of final settlement.

Binary Option Gold
Exchange Code	03
Commodity Code	PG
Underlying:	Gold
Quotation:	Probability Points
Contract Size:	$1000.00
Maximum Contract Price	100.0
Minimum Contract Price	00.0
Minimum Tick Size:	0.1
Outright Tick Value:	$1.00
Reportable Position	25 Contracts
Position Limit	400 Contracts
Strike Increments	A minimum of nine call strikes based on end of week at the money value. Strikes to be added as necessary. Strike increment of $10.
Daily Settlement Price	Based on trading conditions at close.
Final Settlement Time:	1:00 p.m. Chicago time on the last trading day.
Final Settlement	Cash Settled; If the option is deemed in the money given its strike price, the option will cash settle at $1000.00. If not, it will cash settle at $0.00. Refer to exchange rules for determination of final settlement.

Binary Option Oil
Exchange Code	03
Commodity Code	PC
Underlying:	Oil
Quotation:	Probability Points
Contract Size:	$1000.00
Maximum Contract Price	100.0
Minimum Contract Price	00.0
Minimum Tick Size:	0.1
Outright Tick Value:	$1.00
Reportable Position	25 Contracts
Position Limit	400 Contracts
Strike Increments	A minimum of nine call strikes based on end of week at the money value. Strikes to be added as necessary. Strike increment of $1.
Daily Settlement Price	Based on trading conditions at close.
Final Settlement time:	1:30 p.m. Chicago time on the last trading day.
Final Settlement	Cash Settled; If the option is deemed in the money given its strike price, the option will cash settle at $1000.00. If not, it will cash settle at $0.00. Refer to exchange rules for determination of final settlement.

Additional specifications applicable to each Binary Option contracts are as follows:

Trading Hours (CT)	5:25 pm to 4:00 pm Sunday through Friday, Chicago Time
Expiration Cycle:	Contracts expire weekly on the last trading day of the week.
Last Trading Day:	Last business day of the week.
EFP/EFS Details	N/A

Trade Management:

MQM add duplication messages will be sent to the Clearing Participants back office systems in the TREX record format. Clearing Participants may submit MQM change records to CCorp to change non-critical trade information, or mark a trade as a give-up. Clearing Participants can also mark trades as give ups via the CCorp Trade Management system. Current GAPI processing between CCorp and the Clearing Participant will be used.

Position Management:

Clearing Participants should submit open interest to CCorp, either by submitting an Open interest FTP file or using the web based Position Management System. Position Management also allows participants users to perform intra-day position adjustments and intra firm transfers. Listed below are the processes and availability.

Process	Application	Available	DUE
Final Open Interest File Due	FTP Put	Anytime during current business day	8:00 p.m.
Final Open Interest	Position Management	7:15 p.m.	8:00 p.m.
Online verification of final open interest	Position Management	7:15 p.m.	8:00 p.m.
Adjustments to final open interest	Position Management	After end of day final processing	10:00 a.m. next business day.
Position Adjustments	Position Management	10:15 a.m.	7:00 p.m.
Intra-firm position adjustments	Position management	After end of day final processing	7:00 p.m.

Validation of Final Open Interest:

Participants can only submit one final position record by origin for each valid contract that it is currently trading in and/or is holding positions in. CCorp will perform a maximum long and minimum long calculation for each final position reported. The calculation will be performed using the participant’s incoming prior day position, adjustments, current day’s buys, current day’s sells, transfers, exercises (if applicable), and deliveries (if applicable). If a participant’s submitted final position falls outside these calculated parameters, the final reported position will be in error. Participants have the opportunity to review and update errors prior to final processing, please refer to table above. If a firm fails to update an error, CCorp will adjust the final long position accordingly which will be as close as possible to the firm’s reported position using the current day’s activity. Furthermore, CCorp will assume any activity in a contract that a participant does not report a final position in to be adjusted as closing positions. Additionally, futures created from option assignments will also be considered closing positions.

Large Trader Reporting:

The Clearing Corporation (CCorp) will facilitate large trader reporting functionality for the US Futures Exchange.

Firms have the option of either submitting large trader information via an FTP put command, or entering their large trader data through the Exchange Reporting screens on the OTIS® system. Firms that will be submitting large trader positions via FTP should use the P6 record layout when reporting.

Should you have any questions, please call or e-mail one of the following Client Services and Support Representatives: