The Philadelphia Stock Exchange, Inc. (Phlx) has proposed to list and trade options on Exchange-Traded Fund Shares with a unit of trading of 1000 Exchange-Traded Fund Shares and on Trust Issued Receipts with a unit of trading of 1000 Trust Issued Receipts, in each case with a European-style exercise feature (collectively, Jumbo Options).

An American-style option may be exercised at any time prior to its expiration whereas a European-style option may be exercised only on its expiration date. The purpose of the proposal is to expand options investors’ choices by listing and trading option contracts on Jumbo Options. Jumbo Options will have the same terms as regular sized options except for the European-style exercise feature and the size of the trading units will be ten times larger.

Phlx believes that the Jumbo Options contracts will appeal to institutional and other large investors as the European-style exercise option will permit writers of Jumbo Options to more easily manage their risk because the options will not be exercised prior to their expiration date.

http://www.phlx.com/exchange/rulefilings/2008/SR-2008-11.pdf