PreferredTrade and ORATS Announce Technology Alliance, PreferredMakor Product Launch

CHICAGO and SAN FRANCISCO, June 24, 2003 – PreferredTrade, Inc., and Option Research and Technology Services ("ORATS") today announced a technology alliance and the launch of the PreferredMakor, an auto-quoting and risk management product. PreferredMakor provides members of the five options exchanges, starting at the CBOE, with the ability to automatically quote every option series to which they are assigned and to manage the risk of their overall position in a real-time environment.

"Auto-quoting is the market marker’s next step into the future of option trading," said Mike Engmann, CEO of PreferredTrade. "We are proud to be part of this transformation and to provide market makers with the best of tools based on the extensive volatility data and analysis methodology by ORATS and the extensive electronic trading technology of Preferred. This is a product that is a must for the next generation of market makers."

PreferredMakor uses the ORATS Methodology, which is based on a 6-year database of securities tick information, to develop enhanced volatility inputs to its Skewalator platform. PreferredMakor is supported on the Preferred Trade systems infrastructure, which uses Microsoft .Net technology in a server/client configuration. The result is a 'thin client' on the trader's computer that produces very fast calculations and quoting because most of the computing is done on a remote server. Streaming quotes and the Skewalator functionality allow a market maker to change volatilities and options theoretical values to quickly meet the constantly changing demands of the marketplace and continually present fresh quotes to exchange auto-quoting systems.

"We are very pleased to be in this venture with PreferredTrade," said Matt Amberson, President of ORATS. "As a former CBOE floor trader and manager of a trading firm, I know that ORATS’ volatility methodology combined with Preferred’s trading technology and infrastructure provides a dynamic auto-quoting product."

PreferredMakor will work either as a handheld or a desktop application that is easy to download from the PreferredTrade website. The application is part of a managed service that does not require the user to maintain market data servers and does not monopolize much network bandwidth. PreferredMakor was developed by PreferredTrade and ORATS and will be marketed by the sales forces of each firm.

PreferredTrade was founded in 1982 and is a registered broker-dealer and member of the NYSE, NASD, NFA, SIPC and all U.S. Options Exchanges. Preferred has a history of providing quick and efficient equity executions to professional market makers on the U.S. options exchanges. It has taken its understanding of direct market access and quick executions to the retail customer market with its Internet based trading platform. The PreferredMakor product combines Preferred’s expertise on the floor and Internet.

ORATS was founded in 2001 and provides equity option research along with the technology to use it. The advantages of its research include underlying volatility measurements based on tick data and implied volatility surface summarizations performed on extensive historical option quote databases. The advantages of its methodology include automated quote adjustment algorithms, easy-to-use volatility manipulation tools and real-time searching capabilities. The advantages of its services include more than 30 years of combined experience in option position strategy, execution and risk management. The PreferredMakor combines all three, research, technology and service, and provides a solution to the market makers providing liquidity on the floor of the exchange where ORATS has its roots, the Chicago Board Options Exchange.

Preferred Trade: Michael Dunne (312) 542-5701

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