From: J.P. Van Horn
Sent: February 27, 2007
Subject: File No. SR-CBOE-2006-106

The CBOE Exercise Right Privilege (ERP) is an item of value. While more abstract than items of value like homes or cars, it might be thought of as similar to a franchise.

It is an item of value with an established market. It is an asset that can be bought and sold, leased or used to make a living in the process of price discovery.

In a free market economy assets are not supposed to be eliminated by rule changes or legislation. The asset's value is allowed to fluctuate and its value is allowed to drop to zero if the market for it so dictates.

If an asset is eliminated by rule change or legislation, its value does not disappear. The value is actually acquired by another owner who doesn't pay for it in an open and honest exchange. It is effectively stolen from the person who paid real money for it and took the risk in owning it.

The CBOE apparently needs to eliminate the ERPs. Acquisition of the ERP's in a fair exchange is the only just method that will give the CBOE the right to accomplish their need.

Allowing any other method of eliminating the ERPs is in direct contrast to the foundation of price discovery in an open and freely trading market on which all exchanges have created value.

CBOT Full Member