The Constitution and Rules of the Chicago Board Options Exchange, Incorporated (“Exchange”), in certain specific instances, require the Exchange to provide notice to the Exchange membership. To satisfy this requirement, a complimentary copy of the
Exchange Bulletin, including the Regulatory Bulletin, is delivered by hard copy or e-mail to all effective members on a weekly basis.
CBOE members are encouraged to receive the Exchange and Regulatory Bulletin and Information Circulars via e-mail. E-mail subscriptions may be obtained by submitting your name, firm if applicable, mailing address, e-mail address, and phone number, to members@cboe.com, or, by contacting the Membership Department by phone, at 312-786-7449. There is no charge for e-mail delivery of the Exchange and Regulatory Bulletin or for Information Circulars. If you do sign up for e-mail delivery, please remember to inform the Membership Department of e-mail address changes.
Additional subscriptions for hard copy delivery after the first complimentary copy may be obtained by submitting your name, firm if any, mailing address, e-mail address and telephone number to: Chicago Board Options Exchange, Accounting Department, 400
South LaSalle, Chicago, Illinois 60605, Attention: Bulletin Subscriptions. The cost of an annual subscription (January 1 through
December 31) is $200.00 ($100.00 after July 1), payable in advance. The Exchange reserves the right to limit subscriptions by nonmembers.
For up-to-date Seat Market Quotes, call 312-786-7456 or refer to CBOE.com and click “Seat Market Information” under the “About
CBOE” tab. For access to the CBOE Member Web Site, please also notify the Membership Department by sending an e-mail to members@cboe.com or by phone at 312-786-7449.
Copyright © 2005 Chicago Board Options Exchange, Incorporated
CLASS
BID OFFER LAST SALE AMOUNT LAST SALE DATE
October 6, 2005 CBOE $550,000.00 $625,000.00
$625,000.00
CBOT FULL MEMBERSHIP
CLASS BID OFFER LAST SALE AMOUNT
With CBOE Exercise Right $2,105,000.00 $2,350,000.00 $2,110,000.00
LAST SALE DATE
October 14, 2005
Without CBOE Exercise Right $2,000,000.00 $0.00
$1,900,000.00
October 4, 2005
CBOE Exercise Right $90,000.00
$145,000.00
$100,000.00
October 13, 2005

Page 2 October 14, 2005 Volume 33, Number 41 Chicago Board Options Exchange
Terminated Participants Acronym Termination Date
Individual Membership Applicants Date Posted
Martin L. Dim QGR 10/6/05
Thomas W. Burke, CBT-RF
Northern Access LLC
16468 Eagle Ridge Drive
Minnetonka, MN 55345
10/07/05
Martin L. Dim
Paul A. Oldani
QPV
QGS
10/6/05
10/6/05
10/10/05 Paul A. Oldani QDP 10/6/05 Mark L. Elafros, Nominee
Ronin Capital, LLC
2679 Walters Avenue
Northbrook, IL 60062
Paul A. Oldani QEW 10/6/05
Paul A. Oldani QFS 10/6/05
John L. Cox, Lessor
5201 Central
Western Springs, IL 60558
10/11/05
Paul A. Oldani QJY 10/6/05
Paul A. Oldani QLO 10/6/05
Paul A. Oldani QMD 10/6/05
New Leases Effective Date
Paul A. Oldani QNY 10/6/05
Lessor: Joseph A. Pirus 10/10/05
Lessee: Robert C. Sheehan & Associates, LLC
Matthew J. Benson, NOMINEE
Rate: 1.2455% Term: Monthly
Paul A. Oldani
Paul A. Oldani
QPO
QSM
10/6/05
10/6/05
Paul A. Oldani QUT 10/6/05
Paul A. Oldani QVA 10/6/05
Individual Members
Paul A. Oldani QYS 10/6/05
CBT Registered For: Termination Date
Paul A. Oldani QZT 10/6/05
Martin L. Dim (MLD)
Prospect Trading LLC
221 E. Walton St., Apt. #20 W
Chicago, IL 60611
10/6/05
Paul A. Oldani
Paul A. Oldani
QIS
QMP
10/6/05
10/6/05
10/6/05
Paul A. Oldani QNA 10/6/05
Paul A. Oldani (OLD)
Susquehanna Investment Group
175 W. Jackson - Ste. 1700
Chicago, IL 60604
Paul A. Oldani QPN 10/6/05
Paul A. Oldani QYH 10/6/05
William Joseph Babiarz (BBB)
Saen Options USA Inc.
440 S. LaSalle, Ste. #1506
Chicago, IL 60605
10/10/05
William Joseph Babiarz QDH
William Joseph Babiarz QOS
10/10/05
10/10/05
***Correction to Bulletin Dated 10/5/05***
Member Organizations
Lessor(s): Termination Date
Individual Members Effective Date
10/6/05
Argento Trading Company LP
Paul A. Sobota
Kaya Flamboyan 9 - PO Box 812
Curacao
9/29/05
Terrance G. Boyle
From: Owner; Remote Market Maker
To: Owner; Market Maker
Member Organizations Effective Date
Individual Members
Nominee(s) / Inactive Nominee(s): Effective Date
Cameron L. Morrison (CAM)
ROQ Capital, LLC
20 S. Wacker
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
10/11/05
Lehman Brothers Inc.
From:
10/10/05
Lessor/ Owner/ Non-Member Customer Business;
To:
Associated with a Market Maker/ Floor Broker/ Remote
Market Maker
Owner/ Non-Member Customer Business/ Member
Organization Affiliated with a CBT Registered For;
Associated with a Market Maker/ Floor Broker/ Remote
Marker Maker
Member Organizations Effective Date
Woody Creek Capital Management, LLC 10/6/05
6740 Epping Forest Way N., Ste.102
Jacksonville, FL 32217

Page 3 October 14, 2005 Volume 33, Number 41 Chicago Board Options Exchange
The following Research Circulars were distributed between October 7 and October 13, 2005. If you wish to read the entire document, please refer to the CBOE website at www.cboe.com and click on the “Trading Tools” Tab. New listings and series information is also available in the
Trading Tools section of the website. For questions regarding information discussed in a Research Circular, please call The Options Clearing
Corporation at 1-888-OPTIONS.
Research Circular #RS05-726
October 7, 2005
Providian Financial Corporation
(“PVN/adj. PHV/ZZM/LFH”)
Determination of Cash-in-Lieu Amount
Research Circular #RS05-728
October 7, 2005
The Gillette Company (“G/adj. GBV/OXA/YFG”)
Determination of Cash-in-Lieu Amount
Research Circular #RS05-729
October 7, 2005
Electronics Boutique Holdings Corp.
(“ELBO/LQB”) Merger COMPLETED with GameStop Corp. (“GME”)
Research Circular #RS05-730
October 7, 2005
America West Holdings Corporation Class B
(“AWA/adj. ARF”)
Determination of Cash-in-Lieu Amount
Research Circular #RS05-731
October 7, 2005
Guilford Pharmaceuticals, Inc.
(“GLFD/adj. GLY/ZDQ”)
Determination of Cash-in-Lieu Amount
Research Circular #RS05-732
October 10, 2005
Global Payments Inc. (“GPN”)
2-for-1 Stock Split
Ex-Distribution Date: October 31, 2005
Research Circular #RS05-733
October 11, 2005
MCI Inc. (“MCIP/MQI/OWQ/YXW”)
CONTRACT ADJUSTMENT FOR SPECIAL CASH DIVIDEND
Ex-Date: October 13, 2005
Research Circular #RS05-734
October 12, 2005
*****UPDATE*****UPDATE*****UPDATE*****
PetroKazakhstan Inc. Class A (“PKZ”)
Proposed Plan of Arrangement with CNPC International Ltd.
Research Circular #RS05-735
October 13, 2005
PanAmSat Holding Corporation (“PA”)
Proposed Merger with Intelsat, Ltd.
Research Circular #RS05-736
October 13, 2005
PalmSource, Inc. (“PSRC/MQS”)
Proposed Merger with ACCESS Co., Ltd.

October 19, 2005
Volume RB16, Number 42
The Constitution and Rules of the Chicago Board Options Exchange, Incorporated
(“Exchange”), in certain specific instances, require the Exchange to provide notice to the membership. The weekly Regulatory Bulletin is delivered to all effective members to satisfy this requirement.
Copyright © 2004 Chicago Board Options Exchange, Incorporated
Regulatory Circular RG05-84
Date: October 6, 2005
To: Members, Member Firms, Member Organizations and Hybrid Quote Vendors
From: Trading Operations
Re: Hybrid Opening System Enhancement
Beginning October 7, 2005, the second phase of the Hybrid Opening System Enhancements (HopE) will be implemented. An additional Opening Exchange Prescribed Width
(OEPW) will now be in use to accommodate both Regular and LEAPS series. Previously there was only one OEPW set to LEAPS width in use for all series.
Bid Price
For bids of $.00 - $1.95
For bids of $2.00 - $5.00
For bids of $5.10 - $10.00
For bids of $10.10 - $20.00
For bids of $20.10 and above
Standard
OEPW
$0.25
$0.40
$0.50
$0.80
$1.00
LEAP
OEPW
$0.50
$0.80
$1.00
$1.60
$2.00
The system uses OEPW settings to calculate the valid opening range for each series.
• To calculate the bid for the opening range: The midpoint of the Best Bid/
Best Offer (quotes and ‘I’ orders) minus one half the Opening Exchange
Prescribed Width (OEPW).
• To calculate the offer for the opening range: The midpoint of the Best Bid/
Best Offer (quotes and ‘I’ orders) plus one half of the OEPW.
OEPW Methodology
XYZ Aug. 10 Calls
Valid Opening Price Range is
DPM quote 1.00-1.20 50x50
MM quote .95-1.15 50x50
RMM quote .90-1.10 50X50
.925 – 1.175 (see formula below)
100 lot market order to sell
Formula = Mid-point of best bid/ask = 1.05. 1.05 minus ½ of the OEPW of .25 cents = .925
and plus ½ is 1.175
The result of the calculation is rounded to the widest valid price point so the Valid Opening
Range is .95 - 1.20
There is enough liquidity to open at .95, and .95 is within the valid opening price range. The opening trade will be at .95.

Regulatory Circulars continued
Regulatory Circular RG05-84 continued
Also included in this phase of HOpE are Pre-Opening Estimated Opening Price and Size
Messages. Indications of opening price and size, and enhanced imbalance messages now including both price and size will be disseminated at 30 second intervals in preopening and at 3 second intervals, if necessary, in Opening Rotation. Please check with your software provider if you are not receiving these messages.
In addition, on October 4, 2005, an enhancement was implemented that prevents the opening of equity and ETF option classes until a bid/ask, as well as a print, for the underlying is received from the primary exchange.
Questions concerning this information should be directed to the CBOE Direct Help Desk at
(866) 728-2263 or helpdesk@cboe.com.
Regulatory Circular RG05-85
To: Members
From: Legal Division
Department of Market Regulation
Date: October 5, 2005
Re: Modified ROS Opening Procedure on Settlement Dates of Volatility Options and Futures
The Securities and Exchange Commission has approved an amendment to CBOE
Rule 6.2A.03 relating to the modified ROS opening procedure on the settlement dates of volatility index options and futures. SPX and DJX options are the only index option classes currently using the modified ROS opening procedure.
1 In the event that an option class for which the modified ROS opening procedure is currently used is moved to the Hybrid Trading System, the modified ROS opening procedure will no longer be used for that option class. In that event, the Exchange will issue a subsequent circular with regard to the applicable opening procedures.
Under the approved rule change, all index option orders for participation in the modified ROS opening procedure that are related to positions in, or a trading strategy involving, volatility index options or futures, and any change to or cancellation of any such order
(A) must be received prior to 8:00 a.m. and
(B) may not be cancelled or changed after 8:00 a.m., except that any such order may be changed or cancelled after 8:00 a.m. and prior to 8:25 a.m. in order to correct a legitimate error, in which case the member submitting the change or cancellation shall prepare and maintain a memorandum setting forth the circumstances that resulted in the change or cancellation and shall file a copy of the memorandum with the CBOE Department of Market Regulation no later than the next business day.
Additionally, all other index option orders for participation in the modified ROS opening procedure, and any change to or cancellation of any such order, must now be received prior to 8:25 a.m. The previous submission deadline was 8:28 a.m.
RB2
1 The final settlement values of the CBOE Volatility Index and CBOE DJIA Volatility Index futures contracts are calculated from the sequence of opening prices of SPX options and DJX options, respectively.
October 19, 2005, Volume RB16, Number 42

Regulatory Circulars continued
Regulatory Circular RG05-85 continued
In general, the Exchange shall consider index option orders to be related to positions in, or a trading strategy involving, volatility index options or futures for purposes of
Rule 6.2A.03 if the orders possess the following three characteristics:
(1)
(2)
The orders are for options series with the expiration month that will be used to calculate the settlement price of the applicable volatility index option or futures contract. (For example, in the case of VIX futures, the orders would be in SPX option series that expire one month following the settlement date of the expiring VIX futures contract).
The orders are for options series spanning the full range of strike prices in the appropriate expiration month for options series that will be used to calculate the settlement price of the applicable volatility index option or futures contract, but not necessarily every available strike price.
(3) The orders are for put options with strike prices less than the “at-the-money” strike price and for call options with strike prices greater than the “at-themoney” strike price. The orders may also be for put and call options with
“at-the-money” strike prices.
Whether index option orders are related to positions in, or a trading strategy involving, volatility index options or futures for purposes of Rule 6.2A.03 depends upon the specific facts and circumstances. This circular is intended to provide guidance regarding what types of orders would generally be considered to fall within this category of orders. Other types of orders may also be deemed by the Exchange to fall within this category of orders if the Exchange determines that to be the case based upon the applicable facts and circumstances.
Questions regarding this circular may be directed to David Doherty, Legal Division, at (312) 786-7466 or Steven Slawinski, Department of Market Regulation, at (312) 786-
7744.
Regulatory Circular RG05-86
Date: October 5, 2005
To: Members and Member Firms
From: Regulatory Services Division
Re: Description of Procedures for the ROS Opening on Volatility Index Futures and Options Contract Settlement Days
This regulatory circular describes procedures for the modified ROS opening procedure on the settlement days of volatility index futures and option contracts. The modified
ROS opening procedure is currently used for (1) DJX options on settlement days for CBOE
DJIA Volatility Index futures contracts and (2) SPX options on settlement days for VIX futures. In the event that an option class for which the modified ROS opening procedure is currently used is moved to the Hybrid Trading System, the modified ROS opening procedure will no longer be used for that option class. In that event, the Exchange will issue a subsequent circular with regard to the applicable opening procedures.
October 19, 2005, Volume RB16, Number 42 RB3

Regulatory Circulars continued
Regulatory Circular RG05-86 continued
The settlement date for listed volatility index options and futures contracts is on the Wednesday immediately prior to the standard Friday options expiration. CBOE Rule
6.2A.03 provides for a modified ROS opening procedure in DJX and SPX options only on the settlement date of volatility index futures and options. The normal ROS opening procedure will occur on all other days and on the volatility index futures and options settlement date in all DJX and SPX option contract months whose prices are not used to calculate the applicable volatility index.
Orders Eligible for Participation in the Modified ROS Opening Procedure
In the DJX and SPX ROS opening on that Wednesday only, all orders (including public customer, broker-dealer, CBOE Market-Maker and away Market-Maker and specialist orders), other than contingency orders, may be placed in the electronic book only in the
DJX and SPX option contract month whose prices are used to calculate the CBOE DJIA
Volatility Index and VIX (together, “Volatility Index”). The option contract prices used in the
Volatility Index on the final settlement date will always be the prices in the contract month immediately following the month in which there is a final settlement date for Volatility Index futures or options contracts ( e.g., a June 05 final settlement date for Volatility Index futures and options contracts will use July 05 option prices to calculate the Volatility Index). Since the other option contract months are never used in the calculation of a Volatility Index on the final settlement date, Market-Maker and broker-dealer orders may not be placed in the electronic book for those months. In addition, in order to participate in the ROS opening, all orders for placement in the electronic book, and any change to or cancellation of any such order, must be received prior to 8:25 a.m.
Order Submission Deadlines for Participation in Modified ROS Opening Procedure
All index option orders for participation in the modified ROS opening procedure that are related to positions in, or a trading strategy involving, volatility index options or futures, and any change to or cancellation of any such order
(A) must be received prior to 8:00 a.m. and
(B) may not be cancelled or changed after 8:00 a.m., except that any such order may be changed or cancelled after 8:00 a.m. and prior to 8:25 a.m. in order to correct a legitimate error, in which case the member submitting the change or cancellation shall prepare and maintain a memorandum setting forth the circumstances that resulted in the change or cancellation and shall file a copy of the memorandum with the CBOE Department of Market Regulation no later than the next business day.
In general, the Exchange shall consider index option orders to be related to positions in, or a trading strategy involving, volatility index options or futures for purposes of
Rule 6.2A.03 if the orders possess the following three characteristics:
(1) The orders are for options series with the expiration month that will be used to calculate the settlement price of the applicable volatility index option or futures contract. (For example, in the case of VIX futures, the orders would be in SPX option series that expire one month following the settlement date of the expiring VIX futures contract).
(2) The orders are for options series spanning the full range of strike prices in the appropriate expiration month for options series that will be used to calculate the settlement price of the applicable volatility index option or futures contract, but not necessarily every available strike price.
RB4 October 19, 2005, Volume RB16, Number 42

Regulatory Circulars continued
Regulatory Circular RG05-86 continued
(3) The orders are for put options with strike prices less than the “at-the-money” strike price and for call options with strike prices greater than the “at-themoney” strike price. The orders may also be for put and call options with
“at-the-money” strike prices.
Whether index option orders are related to positions in, or a trading strategy involving, volatility index options or futures for purposes of Rule 6.2A.03 depends upon the specific facts and circumstances. This circular is intended to provide guidance regarding what types of orders would generally be considered to fall within this category of orders. Other types of orders may also be deemed by the Exchange to fall within this category of orders if the Exchange determines that to be the case based upon the applicable facts and circumstances.
Market-Maker and Broker-Dealer Order Submission Procedures
Market-Makers not in the DJX and SPX pits and broker-dealers must electronically submit orders for placement in the electronic book for the modified ROS opening. Market-
Makers in the DJX and SPX pits may submit orders for placement in the electronic book for the modified ROS opening via one of the following methods:
1.
2.
3.
Submit the order to a floor broker that has access to CBOE’s Order Routing System (ORS).
Submit the order through a hand-held terminal that has futures/options routing functionality ( e.g., FOC, REDI).
Submit a paper ticket to the Order Book Official (Note: Only paper tickets for market orders will be accepted – limit orders may not be submitted via paper ticket for placement in the electronic book for participation in the
ROS opening).
All Market-Maker orders should designate the Market-Maker account in the CMTA field of the order.
CBOE’s trading systems automatically cancel Market-Maker and broker-dealer orders that are entered in the electronic book for the modified ROS opening procedure but are not executed at the opening in the option contract months whose prices are used to calculate a Volatility Index. Therefore, Market-Makers and broker-dealers are not required to cancel these orders immediately following the opening.
Market-Maker Requirements in the Modified ROS Opening Procedure
All Market-Makers, including LMMs, who are required to log on to ROS or RAES for the current expiration cycle are required to log on to ROS during the modified ROS opening procedure if the Market-Maker is physically present in the DJX or SPX trading crowd, as applicable. On the Wednesday of a Volatility Index futures or options contract settlement only, all DJX or SPX LMMs, as applicable, will collectively set the Autoquote values that will be used by ROS to calculate the opening prices for all series in the option contract months whose prices are used to calculate the Volatility Index. ROS contracts to trade in DJX and
SPX will be assigned equally, to the greatest extent possible, to all logged-on Market-
Makers, including the LMMs.
LMMs are required to set Autoquote values for the modified ROS opening procedure consistent with their obligation to price option contracts fairly. In addition, members submitting orders for placement on the electronic book may not do so for the purpose of creating or inducing a false, misleading, or artificial appearance of activity or for the purpose of unduly or improperly influencing the opening price or settlement or for the purpose of making a price which does not reflect the true state of the market. Violations of these requirements are subject to disciplinary action.
October 19, 2005, Volume RB16, Number 42 RB5

Regulatory Circulars continued
RB6
Regulatory Circular RG05-86 continued
Signing on to ROS for the Modified ROS Opening Procedure
All Market-Makers who are required to log on to ROS for the modified ROS opening procedure must do so prior to 8:25 a.m.
Signing on to ROS requires a change in the Market-Maker’s profile found on the
RAES sign-in terminal. All Market-Makers signed on to RAES that are not LMMs are signed on using the letter ‘Z’ in the field before the affected class symbol. Signing on to
ROS as well as RAES requires that the letter ‘Z’ be changed to a ‘B’ for both (ROS &
RAES).
Prior to signing on for the day, type in the Market-Maker’s acronym and password and hit F15 once. Change the ‘Z’ in front of the necessary symbols to ‘B’ and hit F15 again.
At some point after the opening and prior to the next ROS opening, Market-Makers that are not LMMs must change their profile to once again show a ‘Z’ indicating RAES only.
Any questions regarding this circular may be directed to Steve Slawinski of the
Regulatory Division at 312-786-7744 or Patrick Fay of the CBOE Futures Exchange at 312-
786-7925.
(Replaces RG05-41)
Regulatory Circular RG05-87
Date: October 7, 2005
To: Members, Member Firms and Member Organizations
From: Index Floor Procedure Committee
Re: Expansion of Routing into the Complex Order Book (COB)
The Index Floor Procedure Committee has approved the routing of complex orders for origins CUSTOMER, FIRM and BD directly into the COB, or from PAR to the COB, for exchange-trade fund and trust issued receipt products, and all Hybrid index classes with the exception of SPY. (For additional information on options classes already routing to the
COB, see Regulatory Circulars RG05-70 and RG05-78).
Routing changes for these products will be rolled out beginning October 7, 2005. Member firms will be contacted by CBOE staff to confirm routing parameters. With these changes, orders will be eligible to route directly into the COB, bypassing PAR, or from PAR to the
COB. Orders routed to the COB that are marketable will trade immediately, while those that are not marketable will simply book and rest in the COB. Resting COB orders will be canceled electronically upon receipt of a cancel request and will execute electronically if:
(1)
(2)
(3) the individual series quotes line-up to make the order marketable; an opposing order that can trade with the resting order is received into the
COB; or a Hybrid market participant submits an order to trade with the resting order.
Hybrid market participants who use third party auto-quote systems should contact their vendor regarding COB functionality.
Questions regarding this circular or the COB in general may be directed to Anthony
Montesano at x7365, Mike Trees at x8408 or the Help Desk at x4100.
October 19, 2005, Volume RB16, Number 42

(supersedes Regulatory Circular RG05-62)
CME (S&P 500 ® FUTURES)
60 POINTS (5%) BELOW
PREVIOUS DAY’S SETTLEMENT
Limit comes into effect: On CME opening
(8:30 a.m.)
NYSE ACTION
Trading halt: For 2 minutes if the offer is at limit 10 minutes after limit is reached or at
2:30 p.m.
Limit no longer in effect: After the
2 minute halt or, if no halt, 10 minutes after the limit is reached or otherwise at 2:30 p.m.
When the DJIA advances (or declines)
150 points from the previous day's close: Index arbitrage orders for S&P 500 ® component stocks must be entered with buy-minus (or sell-plus) instruction until the advance or decline returns to within 70 points from previous day's close.
Discretionary actions include trading halts in individual stocks.
CBOT (DJIA SM FUTURES)
None required.
CBOE ACTION
None required because of CME or CBOT limit or NYSE actions; discretionary actions include trading halts and suspensions.
Except on the last business day before their expiration, CBOE normally will restrict exercise of American style, cash settled index options during any trading halt that occurs prior to 3:00 p.m. CBOE may restrict exercise in equity options (other than during the 10 business days before their expiration), but it normally will not do so because of trading halts.
120 POINTS (10%) BELOW
PREVIOUS DAY’S SETTLEMENT
Under Normal Limits
Limit comes into effect: After the 55 point
(5%) limit or at 2:30 p.m.
1050 DJIA POINTS (10%)
BELOW PREVIOUS DAY'S
CLOSING VALUE
Trading halts: Trading in all stocks halts for the following time periods when the
DJIA reaches this value at the following times:
Trading halts: Trading will halt for the following time periods if the futures contract
is limit offered under the following circumstances:
Before 1:00 p.m.: for one hour;
From 1:00 p.m. but before 1:30 p.m.: for 30 minutes;
From and after 1:30 p.m.: no mandated trading halt
During an NYSE trading halt: Until
NYSE ends its trading halt and 50% of
the underlying stocks (capitalization weighted) have resumed trading.
After 1:30 p.m., if no NYSE trading halt is declared: For 2 minutes if the contract is limit offered 10 minutes after the limit is reached.
Limit no longer in effect: After a mandated futures trading halt.
******
Under Second Day Limits (those applicable on a day after the futures contract was limit offered at the 240 point (20%) level at the close of trading).
Limit comes into effect: After the 55 point
(5%) limit, unless there is an NYSE trading halt, in which case only the 20% limit applies upon reopening.
Trading halts:
During an NYSE trading halt
(regardless whether the futures contract is limit offered): Until NYSE ends its trading halt and 50% of the underlying stocks (capitalization
weighted) have resumed trading.
If no NYSE trading halt is declared:
For 2 minutes if the contract is limit offered 10 minutes after the limit is reached or at 2:30 p.m.
Limit no longer in effect: After a mandated futures trading halt or, if no halt, 10 minutes after the limit is reached or otherwise at 2:30 p.m.
1050 POINTS (10%) BELOW
PREVIOUS DAY'S
SETTLEMENT
Limit comes into effect: On CBOT opening (7:20 a.m.).
Trading halt: If the futures contract is limit offered during an NYSE trading halt, futures trading will halt until NYSE ends its trading halt and 50% of the underlying stocks (capitalization weighted) have resumed trading.
Limit no longer in effect: After futures trading has resumed following an NYSE trading halt or at 1:30 p.m.
Because CME or CBOT limit is reached:
None required; discretionary actions include trading halts and suspensions (with the exercise restrictions described above).
Because NYSE declares fl oor-wide circuit breaker halt: Trading in all CBOE securities halted during NYSE circuit breaker halt (with the exercise restrictions described above).
(OVER)
This information has been compiled by CBOE for general information purposes only, and therefore should not be considered complete or precise. Most matters discussed are subject to detailed exchange rules and to the discretion of exchange offi cials. The rules of the various exchanges are subject to change and may not be refl ected in this information. CBOE assumes no responsibility for any errors or omissions in the information presented. In addition, this circular does not address specialized circumstances, such as the times that would be applicable on days when one or more underlying equity markets is scheduled to close trading earlier than normal or the rules applicable to Chapter 30 securities. These specialized matters are covered in detail by exchange rules. All times listed are Central times.
“S&P” and “S&P 500” are trademarks of Mc-Graw Hill, Inc., and "DJIA" is a service mark of Dow Jones & Company, Inc., and neither company assumes any liability in connection with the trading of any contract based on its indexes.
(Date of issuance: October 10, 2005)

(continued)
Regulatory Circular RG05-88
As of 10/1/05
CME (S&P 500 FUTURES)
180 POINTS (15%)
BELOW PREVIOUS DAY'S
CLOSING VALUE
Under Normal Limits
Limit comes into effect: After the 120 point (10%) limit.
Trading halts: For 2 minutes if the contract is at limit 10 minutes after limit is reached.
Limit no longer in effect: After any such
2 minute halt.
******
NYSE ACTION
None required; discretionary actions include trading halts in individual stocks.
CBOT (DJIA FUTURES) CBOE ACTION
None required; discretionary actions include trading halts and suspensions
(with the exercise restrictions described above).
Limit comes into effect: After the 120 point (10%) limit, unless there is an NYSE trading halt, in which case only the 20% limit applies upon reopening.
Trading halts:
During an NYSE trading halt
(regardless whether the futures contract is limit offered): Until NYSE ends its trading halt and 50% of the underlying stocks (capitalization weighted) have resumed trading.
If no NYSE trading halt is declared:
For 2 minutes if the contract is limit offered 10 minutes after the limit is reached or at 2:30 p.m.
Limit no longer in effect: After a mandated futures trading halt or, if no halt,
10 minutes after the limit is reached or otherwise at 2:30 p.m.
240 POINTS (20%) BELOW
PREVIOUS DAY'S
SETTLEMENT
Limit comes into effect: After the 180 point (15%) limit or, when Second Day
Limits are in effect, at 2:30 p.m. or after trading resumes following an NYSE trading halt.
Limit remains in effect for the remainder of the trading day.
Trading halt:
(Normal Limits): If the futures contract is limit offered during an
NYSE trading halt.
(Second Day Limits): If there is an
NYSE trading halt, regardless whether the futures contract is limit offered.
Trading will resume when NYSE ends its trading halt and 50% of the underlying stocks (capitalization weighted) have resumed trading.
Settlement value will not be less than the limit value, regardless of the value of the cash index.
2100 DJIA POINTS (20%)
BELOW PREVIOUS DAY'S
CLOSING VALUE
Trading halts: Trading in all stocks halts for the following time periods when the
DJIA reaches this value at the following times:
Before 12:00 p.m.: for two hours
From 12:00 p.m. but before 1:00 p.m.: for one hour
From and after 1:00 p.m.: for the remainder of the day
2100 POINTS (20%) BELOW
PREVIOUS DAY'S
SETTLEMENT
Limit comes into effect: After the 1050 point (10%) limit or at 1:30 p.m.
Trading halt: If the futures contract is limit offered during an NYSE trading halt, futures trading will halt until NYSE ends its trading halt and 50% of the underlying stocks (capitalization weighted) have resumed trading.
Limit no longer in effect: After futures trading has resumed following an NYSE trading halt.
Because CME or CBOT limit is reached: None required; discretionary actions include trading halts and suspensions (with the exercise restrictions described above).
Because NYSE declares a fl oor wide circuit breaker halt: Trading in all
CBOE securities halted during NYSE circuit breaker halt (with the exercise restrictions described above).
The 240 point (20%) limit remains in effect.
Settlement value will not be less than the limit value, regardless of the value of the cash index.
3150 DJIA POINTS (30%)
BELOW PREVIOUS DAY'S
CLOSING VALUE
Trading halts and does not reopen for the day.
3150 POINTS (30%)
BELOW PREVIOUS DAY'S
SETTLEMENT
Limit comes into effect: After the 2100 point (20%) limit.
Limit remains in effect for the remainder of the trading day.
Trading halt: Trading shall halt for the rest of the day if the futures contract is limit offered at any time during the trading day and the NYSE declares a trading halt for the rest of the trading day.
If NYSE declares fl oor wide trading halt for the remainder of the day:
CBOE halts trading for the remainder of the day (with the exercise restrictions described above).
Because CBOT limit is reached: None required; discretionary actions include trading halts and suspensions (with the exercise restrictions described above).

Regulatory Circulars continued
Regulatory Circular RG05-89
To: Member Firms
From: Division of Regulatory Services
Date: October 10, 2005
RE: Supplement to the Options Disclosure Document
On March 30, 2005, the Securities and Exchange Commission (“SEC”) approved a Supplement to the Options Disclosure Document (“ODD”) which relates to options on indexes that are intended to measure the predicted volatility of the daily returns of a stock index, as proposed to be traded by the Chicago Board Options Exchange. The current edition of the
ODD contains this supplement. A current copy of the ODD as amended to include the supplement must be delivered to all new options customers.
Member Firms should be aware that Exchange Rule 9.15 requires that each customer who was previously furnished an ODD be furnished with a copy of an amendment to the current
ODD. Member Firms may comply with this requirement in various ways including, but not limited to, one of the following:
(1) The firm may choose to conduct a mass mailing of the Supplement to all of their approved customers who have already received the ODD.
(2) The firm may deliver the Supplement to a customer, who has already received the ODD, with the first confirmation of an option transaction involving a volatility index.
Copies of the ODD or the Supplement may be obtained by contacting Diane Svoboda of the
Options Clearing Corporation at (312) 322–6212 or at dsvoboda@theocc.com. Questions about this memorandum may be directed to Lawrence J. Bresnahan at (312) 786–7713 or
David E. Carlson at (312) 786-7052.
Regulatory Circular RG05-90
Date: October 10 2005
To: Annual Election Candidates
From: Office of the Secretary
Re: 2005 Annual Election Process
The Nominating Committee’s recommended slate of candidates for the Board of Directors and the Nominating Committee was posted on the Exchange bulletin boards and the members’ website on September 30, 2005 (See Informational Circular IC05-131). Candidates in the 2005 annual election should be aware of the following procedures relating to the annual election to be held on Thursday, November 17, 2005. The procedures are derived from the
Exchange’s Constitution and Rules and procedures approved by the Board of Directors.
Petition Process
Nominations of candidates made by petition must be signed by not less than 100 voting members of the Exchange. Petitions must be submitted to the Office of the
Secretary by 5:00 p.m. on Monday, October 31, 2005. After October 31, 2005, members cannot petition against the slate.
October 19, 2005, Volume RB16, Number 42 RB9

Regulatory Circulars continued
RB10
Regulatory Circular RG05-90 continued
Once the petition signatures are verified, valid petition candidates’ names will be posted on the Exchange’s bulletin boards and the members’ website. Both the
Nominating Committee’s recommended slate and the list of petition candidates are published in the Exchange Bulletin.
Mailing Lists
For campaign purposes, candidates may request in writing from the Office of the Secretary a mailing list of voting members. Membership mailing lists will be provided in the form of a computer printout and/or computer disk. Mailing labels will not be provided. Candidates are responsible for processing their own campaign mailings.
Campaign Materials
Members and associated persons of members are advised that creation or distribution of unsigned, defamatory, false, or other inappropriate election or campaign materials may be viewed as engaging in conduct inconsistent with just and equitable principles of trade in violation of CBOE Rule 4.1. Violation of this Rule could lead to Exchange disciplinary proceedings or other Exchange action.
Election Process
The 2005 annual election meeting will be held at 3:30 p.m. on Thursday, November 17,
2005.
Record Date
According to the Constitution, the Board of Directors may fix a record date to determine the members entitled to notice of and to vote at a meeting of the members or any adjournment thereof (“Record Date”). The Record Date will be set not more than 60 days nor less than 10 days before the date of the annual election meeting. If no Record Date is fixed by the
Board of Directors for the annual election meeting, the Record Date for the meeting shall be at the close of business on the day preceding the date on which notice of the meeting is given by the Exchange.
An Information Circular will be issued shortly announcing the Record Date for the 2005 annual election meeting. All voting members who are effective at the close of business on the Record Date will be entitled to vote at the annual election meeting.
Notice
Written notice of the annual election meeting is mailed to members entitled to vote not more than 60 days and not less than 10 days prior to the date of the meeting. The notice states the purpose, date, time and place of the annual election meeting. Notice is deemed to be given by mail at the time of deposit in the U.S. Mail.
After expiration of the nomination by petition period, the Office of the Secretary will prepare a ballot listing all candidates. According to the Constitution, the order of listing on the ballot is chosen by lot. The ballot will mention whether candidates have been nominated by petition or by the Nominating Committee. Additionally, the positions for which the candidates qualify are noted on the ballot.
Candidates should submit a brief biographical sketch (approximately 250 words) to the
Office of the Secretary no later than Monday, October 31, 2005. Petition candidates who submit their petitions on October 31, 2005 will be given an additional day to submit biographical sketches. The Exchange reserves the right to edit the sketches, which will be mailed with the voting materials.
October 19, 2005, Volume RB16, Number 42

Regulatory Circulars continued
Regulatory Circular RG05-90 continued
The Office of the Secretary mails the notice, ballot, proxy, an envelope marked “For Ballot
Only”, a return envelope and any Exchange-prepared supplemental materials to all voting members. The Exchange expects to mail the voting materials to voting members by Thursday, November 3, 2005. The voting materials will also be made available on the password protected members’ website.
Voting
Members entitled to vote may cast a ballot in-person or by proxy. The ballot is unsigned and sealed in the ballot envelope. Members voting by proxy must deliver, by mail or otherwise, the sealed ballot and signed proxy to the Office of the Secretary so that it is received prior to the annual election meeting. At least two election assistants will be available to accept sealed ballots and proxies from members in-person on the trading floor prior to the meeting and accept ballots from members voting at the meeting. The Election Committee keeps records of the members voting and oversees the security of the voting documents and records.
Electioneering is prohibited near the voting stations on the trading floor. A circular regarding electioneering will be issued prior to the annual election.
Quorum
The quorum requirement for the 2005 annual election is a majority of the members entitled to vote, provided that in the event of an uncontested election, one-third of the members entitled to vote shall constitute a quorum. If a quorum is not reached by 3:30 p.m. on
Thursday, November 17, 2005, the meeting will be adjourned until the following business day at 3:30 p.m. Ballots and proxies will continue to be collected on the trading floor, by mail and by delivery until 3:30 p.m. the day that quorum is reached and the annual election meeting held.
Election Results
After the annual election meeting is adjourned, the Election Committee separates the ballots and proxies, then opens the sealed ballot envelopes and counts the votes. An auditor from an independent accredited accounting firm will observe the counting of the ballots.
A plurality of votes will elect candidates for the Board of Directors and the Nominating
Committee. The candidate receiving the highest vote totals among those candidates qualified for the particular position will be elected.
Once the votes are counted, the Election Committee will post the election results on the
Exchange’s 4 th floor bulletin board, the Members’ Web site, and on the Voting Results Hotline
(312) 786-8150. Results will also be published in the Exchange Bulletin.
* * * * *
If you have any questions concerning the annual election process, please contact Jaime
Galvan at 312-786-7058 (galvanj@cboe.com).
October 19, 2005, Volume RB16, Number 42 RB11

Regulatory Circulars continued
Regulatory Circular RG05-91
Date: October 11, 2005
To: Members and Member Organizations
From: Index Floor Procedure Committee
Re: RAES Volume Limit and RAES Log On/Log Off Requirements for the Jumbo Dow (DXL)
The purpose of this circular is to inform members and member organizations of the RAES volume limit for jumbo options on the Dow Jones Industrial Average (“DXL”) and to remind
DXL Market-Makers of the RAES log on and log off requirements in DXL.
RAES ALLOCATION:
The Index Floor Procedure Committee (“IFPC”) has approved the use of the 1000 Spoke
RAES Wheel in the DXL. The IFPC has determined that the size of each spoke in the 1000
Spoke RAES Wheel is 1 contract and the wedge size is 10. The assignment of RAES orders to each logged-on Market-Maker is based on the percentage of the Market-Maker’s contracts traded in the index option class (excluding RAES contracts traded) during the review period.
RAES VOLUME LIMIT:
The IFPC has determined that the RAES volume limit for DXL will be 50 contracts for all
DXL series (including LEAPS) with a price of $50 or less.
LOG ON REQUIREMENTS:
Pursuant to CBOE Rule 24.17, any Market-Maker who has logged onto RAES in the DXL at any time during an expiration month, must continue to do so each time he or she is present in the DXL trading crowd until the next expiration. A Market-Maker may not be logged on RAES in the DXL trading crowd unless he or she is physically present in that respective trading crowd.
LOG OFF REQUIREMENTS:
Any Market-Maker who has logged onto RAES in DXL must log off RAES whenever he or she leaves the DXL trading crowd for other than a brief interval. A brief interval generally means no more than 10 minutes.
FEE SCHEDULE FOR FAILURE TO ADHERE TO LOG ON/LOG OFF REQUIREMENTS:
Except as otherwise provided in the subject Rules, a fee shall be due from any Market-
Maker who fails to adhere to the log on or log off requirements as follows:
NUMBER OF FAILURES
WITHIN A CALENDAR YEAR
1 - 3
4 - 6
7 +
FEE AMOUNT
$100
$250
$500
Fee assessments may be appealed under Chapter XIX of Exchange Rules. The fee assessments do not constitute disciplinary or regulatory action reportable by a Market-
Maker to the Securities and Exchange Commission. Please be aware, however, that these fees may be reportable to other organizations or exchanges.
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Regulatory Circulars continued
Regulatory Circular RG05-91 continued
Finally, be advised that Market-Makers who fail to abide to the requirements and obligations of Rule 24.17 may also be subject to disciplinary action under, among others, Rule 6.20 and
Chapter XVII of the Exchange Rules. Such failure may also be the subject of remedial action by the appropriate Committee, including, but not limited to, suspending a Market-
Maker’s eligibility for participation on RAES and such other remedies as may be appropriate and allowed under Chapter VIII of the Exchange Rules.
Questions regarding the RAES log on and log off requirements in DXL may be directed to the Index Market Performance Committee. Questions concerning the DXL RAES volume limit may be directed to the RAES Supervisors at ext. 4340, or the CBOE Help Desk at (312)
786-7100.
October 19, 2005, Volume RB16, Number 42 RB13

Rule Changes,
Interpretations and Policies
EFFECTIVE-ON-FILING RULE CHANGE(S)
The following rule filing(s) were submitted to the SEC “effective-on-filing,” and have taken effect pursuant to Section 19(b)(3) of the Securities Exchange Act. They will remain in effect barring further action by the SEC within 60 days after their publication in the Federal
Register. Copies are available on the CBOE public website at www.cboe.com/legal/ effectivefiling.aspx.
SR-CBOE-2005-82 Market Turner Priority Overlay
On October 5, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-82, which filing proposes to adopt an optional modified market turner priority overlay for index options trading on Hybrid. Any questions regarding the rule change may be directed to Angelo
Evangelou, Legal Division, at 312-786-7464. New language is underlined.
Rule 6.45B - Priority and Allocation of Trades in Index Options and Options on
ETFs on the CBOE Hybrid System
Generally: The rules of priority and order allocation procedures set forth in this rule shall apply only to index options and options on ETFs that have been designated for trading on the CBOE Hybrid System. The term “market participant” as used throughout this rule refers to a Market-Maker, a Remote Market-Maker, an in-crowd DPM or LMM, an e-DPM with an appointment in the subject class, and a floor broker representing orders in the trading crowd. The term “in-crowd market participant” only includes an in-crowd Market-Maker, in-crowd DPM or LMM, and floor broker representing orders in the trading crowd.
(a) Allocation of Incoming Electronic Orders: The appropriate Exchange procedures committee will determine to apply, for each class of options, one of the following rules of trading priority described in paragraphs (i) or (ii). The Exchange will issue a Regulatory Circular periodically specifying which priority rules will govern which classes of options any time the appropriate Exchange committee changes the priority.
(i) Price-Time or Pro-Rata Priority
Price-Time Priority: Under this method, resting quotes and orders in the book are prioritized according to price and time. If there are two or more quotes or orders at the best price then priority is afforded among these quotes or orders in the order in which they were received by the Hybrid System; or
Pro-Rata Priority: Under this method, resting quotes and orders in the book are prioritized according to price. If there are two or more quotes or orders at the best price then trades are allocated proportionally according to size (in a pro-rata fashion). The executable quantity is allocated to the nearest whole number, with fractions 1/2 or greater rounded up and fractions less than 1/2 rounded down. If there are two market participants that both are entitled to an additional 1/2 contract and there is only one contract remaining to be distributed, the additional contract will be distributed to the market participant whose quote or order has time priority.
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Interpretations and
Policies continued
SR-CBOE-2005-82 continued
Additional Priority Overlays Applicable to Price-Time or Pro-Rata Priority
Methods
In addition to the base allocation methodologies set forth above, the appropriate
Exchange procedures committee may determine to apply, on a class-by-class basis, either or both of the following designated market participant overlay priorities. The Exchange will issue a Regulatory Circular periodically which will specify which classes of options are subject to these additional priorities as well as any time the appropriate Exchange procedures committee changes these priorities.
(1) Public Customer: When this priority overlay is in effect, the highest bid and lowest offer shall have priority except that public customer orders shall have priority over non-public customer orders at the same price. If there are two or more public customer orders for the same options series at the same price, priority shall be afforded to such public customer orders in the sequence in which they are received by the System, even if the Pro-Rata Priority allocation method is the chosen allocation method. For purposes of this Rule, a Public Customer order is an order for an account in which no member, non-member participant in a jointventure with a member, or non-member broker-dealer (including a foreign brokerdealer) has an interest.
(2) Participation Entitlement: The appropriate Exchange procedures committee may determine to grant DPMs, LMMs, or e-DPMs participation entitlements pursuant to the provisions of Rule 8.87 or 8.15B. In allocating the participation entitlement, all of the following shall apply:
(A) To be entitled to their participation entitlement, a DPM’s or LMM’s or e-
DPM’s order and/or quote must be at the best price on the Exchange.
(B) A DPM or LMM or e-DPM may not be allocated a total quantity greater than the quantity that the DPM or LMM or e-DPM is quoting (including orders not part of quotes) at that price. If Pro-Rata Priority is in effect, and the DPM’s or LMM’s or e-DPM’s allocation of an order pursuant to its participation entitlement is greater than its percentage share of quotes/orders at the best price at the time that the participation entitlement is granted, the DPM or LMM or e-
DPM shall not receive any further allocation of that order.
(C) In establishing the counterparties to a particular trade, the DPM’s or LMM’s or e-DPM’s participation entitlement must first be counted against the DPM’s or LMM’s or e-DPM’s highest priority bids or offers.
(D) The participation entitlement shall not be in effect unless the Public Customer priority is in effect in a priority sequence ahead of the participation entitlement and then the participation entitlement shall only apply to any remaining balance.
(3) Market Turner: When this priority overlay is in effect, the Market Turner has priority at the highest bid or lowest offer that he established. The Market Turner priority at a given price remains with the order once it is earned. For example, if the market moves in the same direction as the direction in which the order from the Market Turner moved the market, and then the market moves back to the
Market Turner’s original price, then the Market Turner retains priority at the original price. Market Turner priority cannot be established until after the opening print and/or the conclusion of the opening rotation and once established, shall remain in effect until the conclusion of the trading session.
October 19, 2005, Volume RB16, Number 42 RB15

Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-82 continued
The appropriate Exchange procedures committee may determine, on a class-byclass basis, to reduce the Market Turner priority to a percentage of each inbound order that is executable against the Market Turner. In such cases, the Market
Turner may participate in the balance of an order, pursuant to the allocation procedure in effect, after the Market Turner priority has been applied. To the extent the
Market Turner order is not fully exhausted, it shall retain Market Turner priority for subsequent inbound orders until the conclusion of the trading session.
(ii) No change.
(b)-(d) No change.
…Interpretations and Policies:
.01 - .02 No change.
SR-CBOE-2005-75 RMM Transaction Fee
On September 9, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-75, which filing amends CBOE’s Fee Schedule to establish a $.26 per contract Remote Market-Maker transaction fee for Index options, options on Exchange-Traded Funds (ETFs), and options on Holding Company Depositary Receipts (HOLDRs). Any questions regarding the rule change may be directed to Jaime Galvan, Legal Division, at 312-786-7058.
SR-CBOE-2005-78 SPX LEAPS Fee Change
On September 26, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-78, which filing proposes to amend CBOE’s Fee Schedule to waive fees for certain transactions in the S&P 500 Index options LEAPS through December 15, 2005. Specifically, the filing proposes to waive all trading related fees (transaction, floor brokerage and OBO fees) for transactions in which a market participant closes a position in reduced-value SPX
LEAPS and simultaneously opens a corresponding position in full-value SPX LEAPS.
Any questions regarding the rule change may be directed to Jaime Galvan, Legal Division, at 312-786-7058.
SR-CBOE-2005-80 DPM Transaction Fees
On September 30, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-80, which filing proposes to amend its Fees Schedule to enhance the credit to DPMs for transaction fees they incur related to the execution of outbound “principal acting as agent”
(“P/A”) orders. Any questions regarding the rule change may be directed to Jaime Galvan,
Legal Division, at 312-786-7058.
SR-CBOE-2005-84 Establishment of Fees for “Jumbo” options on the DJX
On October 10, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-84, which filing proposes to amend its Fees Schedule to (i) amend certain fees for options on the
Dow Jones Industrial Average (“DJX”), and (ii) to establish fees for “Jumbo” options on the
Dow Jones Industrial Average (“DXL”). Any questions regarding the rule change may be directed to Jaime Galvan, Legal Division, at 312-786-7058.
RB16 October 19, 2005, Volume RB16, Number 42

Rule Changes,
Interpretations and
Policies continued
PROPOSED RULE CHANGE(S)
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, as amended (“the
Act”), and Rule 19b-4 thereunder, the Exchange has filed the following proposed rule change(s) with the Securities and Exchange Commission (“SEC”). Copies of the rule change filing(s) are available at www.cboe.com/legal/submittedsecfilings.aspx. Members may submit written comments to the Legal Division.
The effective date of a proposed rule change will be the date of approval by the SEC, unless otherwise noted.
SR-CBOE-2005-79 RMM Appointments
On September 30, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-79, which filing proposes to amend CBOE Rule 8.4 relating to Remote Market-Maker (RMM) appointments. Any questions regarding the rule change may be directed to Patrick Sexton,
Legal Division, at 312-786-7467. The text of the proposed rule amendments is set forth below. Proposed new language is underlined. Proposed deleted language is [bracketed and stricken-through].
Rule 8.4. (a) No change.
(b) No change.
(c) No change.
(d) Appointment of RMMs: An RMM will have a Virtual Trading Crowd (“VTC”)
Appointment, which confers the right to quote electronically (and not in open outcry) an appropriate number of products selected from “tiers” that have been structured according to trading volume statistics. Of the products included in the Hybrid 2.0 Platform, Tier A will consist of the 20% most actively-traded products over the preceding three calendar months, excluding “A+” tier products, Tier B will consist of the next 20% most actively-traded products, etc., through Tier E, which will consist of the 20% least actively-traded products. Tier
“A+” will consist of options on Standard & Poor’s Depositary Receipts, options on the Nasdaq-
100 Index Tracking Stock, [and] options on Diamonds, and reduced value options on the
Standard & Poor’s 500 Stock Index.
(e)
(f)
No change.
No change.
[ . . . Interpretations and Policies:
.01 Reallocation of Products Allocated to RMM for Failure to Quote: For each product for which an RMM is assessed an inactivity fee, as described in Section 22 of the Exchange’s
Fee Schedule, the Exchange will reallocate the product from the RMM to another member in accordance with the requirements of Rule 8.3A.]
October 19, 2005, Volume RB16, Number 42 RB17

Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-83 SizeQuote Pilot
On October 11, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-83, which filing proposes to expand the SizeQuote Pilot in Rule 6.74(f), related to the facilitation of large-sized orders in open outcry, to include solicitations. Under the pilot, the appropriate
Market Performance Committee determines the classes in which the SizeQuote Mechanism shall apply and the eligible order size. Though the pilot is available in any option class, it is currently only operative in equity option classes for orders of 250 contracts or more. Any questions regarding the rule change may be directed to Jennifer Lamie, Legal
Division, at 312-786-7576. The text of the proposed rule amendments is set forth below.
Proposed new language is underlined. Proposed deleted language is [bracketed and strickenthrough].
Rule 6.74
“Crossing” Orders
RULE 6.74. (a) – (e) No change.
(f) Open Outcry “SizeQuote” Mechanism
(i) SizeQuotes Generally: The SizeQuote Mechanism is a process by which a floor broker (“FB”) may execute and facilitate large-sized orders in open outcry. Floor brokers must be willing to facilitate the entire size of the order for which they request SizeQuotes (the “SizeQuote Order”) or to execute it against one or more solicited orders, or against a combination of solicited and facilitation orders. The appropriate Market Performance Committee shall determine the classes in which the SizeQuote Mechanism shall apply. The SizeQuote Mechanism will operate as a pilot program which expires February 15, 2006.
(A) Eligible Order Size: The appropriate MPC shall establish the eligible order size, however, such size shall not be less than 250 contracts.
(B) In-crowd Market Participants: The term “in-crowd market participants”
(“ICMPs”) shall be as defined in CBOE Rule 6.45A.
(C) Public Customer Priority: Public customer orders in the electronic book have priority to trade with a SizeQuote [o]Order over any ICMP providing a SizeQuote response at the same price as the order in the electronic book.
(D) DPM Participation Rights: The DPM participation entitlement shall not apply to SizeQuote transactions.
(E) FBs may not execute a SizeQuote [o]Order at a price inferior to the national best bid or offer (“NBBO”). Unless a SizeQuote request is properly canceled in accordance with paragraph (iv), a FB is obligated to execute the entire SizeQuote [o]Order at a price that is not inferior to the
NBBO in situations where there are no SizeQuote responses received or where such responses are inferior to the NBBO.
(ii) SizeQuote Procedure: Upon request by a FB for a SizeQuote, ICMPs may respond with indications of the price and size at which they would be willing to trade with a SizeQuote [o]Order. After the conclusion of time during which interested ICMPs have been given the opportunity to provide their indications, the FB must execute the SizeQuote [o]Order with ICMPs and/or with a firm facilitation order and/or solicited order(s) in accordance with the following procedures:
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SR-CBOE-2005-83 continued
(A) Executing the Order at ICMP’s Best Price: ICMPs that provided
SizeQuote responses at the highest bid or lowest offer (“best price”) have priority to trade with the SizeQuote Order at that best price. Allocation of the order among ICMPs shall be pro-rata, up to the size of each ICMP’s
SizeQuote response. The FB must trade at the best price any contracts remaining in the original SizeQuote Order that were not executed by ICMPs providing SizeQuote responses.
(B) Executing the Order at a Price that Improves upon ICMP’s Price by
One Minimum Increment: ICMPs that provided SizeQuote responses at the best price (“eligible ICMPs”) have priority to trade with the SizeQuote
Order at a price equal to one trading increment better than the best price
(“improved best price”). Allocation of the order among eligible ICMPs at the improved best price shall be pro-rata, up to the size of each eligible ICMP’s
SizeQuote response. The FB must trade at the improved best price any contracts remaining in the original SizeQuote Order that were not executed by eligible ICMPs.
(C) Trading at a Price that Improves upon ICMP’s Price by More than One
Minimum Increment: A FB may execute the entire SizeQuote [o]Order at a price two trading increments better than the best price communicated by the ICMPs in their responses to the SizeQuote request.
(iii) Definition of Trading Increments: Permissible trading increments are $0.05 for options quoted below $3.00 and $0.10 for all others. In classes in which bid-ask relief is granted pursuant to CBOE Rule 8.7(b)(iv), the permissible trading increments shall also increase by the corresponding amount. For example, if a series trading above $3.00 has double-width bid-ask relief, the permissible trading increment for purposes of this rule shall be $0.20.
(iv) It will be a violation of a FB’s duty of best execution to its customer if it were to cancel a SizeQuote [o]Order to avoid execution of the order at a better price. The availability of the SizeQuote Mechanism does not alter a FB’s best execution duty to get the best price for its customer. A SizeQuote request can be canceled prior to the receipt by the FB of responses to the SizeQuote request. Once the FB receives a response to the SizeQuote request, if he/she were to cancel the order and then subsequently attempt to execute the order at an inferior price to the previous
SizeQuote response, there would be a presumption that the FB did so to avoid execution of its customer order in whole or in part by others at the better price.
SR-CBOE-2005-81 Mini-SPX Options
On September 30, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-81, which filing proposes to allow CBOE to list Mini-SPX options, which are options on the reducedvalue version of the S&P 500 Stock Index, at strike price intervals that are no less than $1.
Any questions regarding the rule change may be directed to James Flynn, Legal Division, at
312-786-7070. The text of the proposed rule amendments is set forth below. Proposed new language is underlined. Proposed deleted language is [bracketed and stricken-through].
Rule 5.5 - Series of Option Contracts Open for Trading
Rule 5.5 (a) – (d) No Change.
…Interpretations and Policies:
October 19, 2005, Volume RB16, Number 42 RB19

Rule Changes,
Interpretations and
Policies continued
RB20
SR-CBOE-2005-81 continued
.01 The interval between strike prices of series of options on individual stocks may be: a. $1.00 or greater (“$1 strike prices”) provided the strike price is $20.00 or less, but not less than $3. The listing of $1 strike prices shall be limited to options classes overlying no more than 5 individual stocks (“The $1 Strike Pilot Program”) as specifically designated by the Exchange. The Exchange may list $1 strike prices on any other option classes if those classes are specifically designated by other securities exchanges that employ a similar $1 Strike Pilot Program under their respective rules.
To be eligible for inclusion into the $1 Strike Pilot Program, an underlying stock must close below $20 in its primary market on the previous trading day. After a stock is added to the $1 Strike Pilot Program, the Exchange may list $1 strike prices from $3 to $20 that are no more than $5 from the closing price of the underlying on the preceding day. For example, if the underlying stock closes at $13, the
Exchange may list strike prices from $8 to $18. The Exchange may not list series with $1.00 intervals within $0.50 of an existing $2.50 strike price ( e.g., $12.50,
$17.50) in the same series. Additionally, the Exchange may not list long-term option series (“LEAPS ® ”) at $1 strike price intervals for any option class selected for the $1 Strike Pilot Program.
A stock shall remain in the $1 Strike Pilot Program until otherwise designated by the Exchange. The $1 Strike Pilot Program shall expire on June 5, 2006.
Notwithstanding the foregoing, the Exchange shall designate no more than four individual stocks for inclusion in the $1 Strike Pilot Program at the same time there are strike prices listed at $1 intervals on Mini-SPX options in accordance with
Interpretation and Policy .14 to Rule 24.9.
b. – d. No Change.
.02 - .09 No Change.
.10
Notwithstanding Interpretation and Policy .01 above, the intervals between strike prices of Mini-SPX option series shall be determined in accordance with
Interpretation and Policy .14 to Rule 24.9.
* * * * *
Rule 24.9 – Terms of Index Option Contracts
Rule 24.9(a) – (c) No Change.
…Interpretations and Policies:
.01 - .08 No Change.
.09
The current index value of reduced-value options on the Standard & Poor’s
500 Stock Index (“Mini-SPX options”) shall be one-tenth (1/10) the value of the underlying index reported by the reporting authority.
.10 - .13 No Change.
.14
Notwithstanding Interpretation and Policy .01(a) to Rule 24.9, the interval between strike prices of series of Mini-SPX options will be $1 or greater, subject to the following conditions:
October 19, 2005, Volume RB16, Number 42

Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-81 continued a.
The Exchange may list series at $1 or greater strike price intervals on
Mini-SPX options with strike prices that are no more than 20% away from one-tenth of the current value of the Standard & Poor’s 500 Stock Index
(“S&P 500 Index”). FOR EXAMPLE, if the current value of the S&P 500
Index is at 1,200.00, the Exchange may only list new series at $1 strike price intervals in Mini-SPX options that are between $96 and $144 strike prices.
b.
c.
d.
The Exchange may list series at $3 or greater strike price intervals on
Mini-SPX options with strike prices that are no more than 25% away from one-tenth of the current value of the S&P 500 Index.
The Exchange may list series at $5 or greater strike price intervals on
Mini-SPX options that are more than 25% away from one-tenth of the current value of the S&P 500 Index.
The Exchange shall not list LEAPS or reduced-value LEAPS on Mini-
SPX options at intervals less than $5.
e.
The Exchange shall designate no more than four individual stocks for inclusion in the $1 Strike Pilot Program (Interpretation .01(a) to Rule 5.5) at the same time there are strike prices listed in $1 intervals on Mini-SPX options.
October 19, 2005, Volume RB16, Number 42 RB21