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I read on Historical First Trade Dates (mirror) the introduction dates of options on the E-mini S&P 500 Futures at the Chicago Mercantile Exchange (CME) :

  • E-mini options: 09/09/97
  • End-of-month Options on E-mini S&P 500: 05/21/06
  • Weekly Options on E-mini S&P 500:
    • Weeks 1 & 2: 8/24/09
    • Week 4: 7/06/10

For what reason(s) was the weekly option week 4 (a.k.a. EW4) introduced later than weeks 1 & 2 (a.k.a. EW1 and EW2)? Is it because the 4th Friday of the month of the month is close to the last business day of the month, and therefore the CME was unsure at first whether market participants would be interested in EW4?

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Exchanges are in the business of making money. Most of that money comes in the form of exchange fees for transactions (e.g. fee per contract). As a result, their priorities are to increase volume.

One way for exchanges to increase volume is to offer more choices. People might not want to buy E-Mini futures with a normal monthly expiration as that might not match their own investment needs, or the exchange participant (or their customer) might want a contract with a shorter time to expiration (and therefore lower premium).

These would be the drivers for EW1 and EW2 options. EW4 options would have a higher premium than the regular monthly (third Friday) option, so there would be fewer reasons. However it would look a little silly when picking expirations if you could see EW1, EW2 and EW3 for February and EW1, EW2 and EW3 for March, but no EW4 for February.

As a result, it would have likely been added for completeness. As far as what specific internal discussions took place when deciding to list these options, you would have to ask someone at CME who could comment on the matter.

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