It feels, smells, acts and has the same flavor as a stock, said Nicholas A. Giordana, president of the Philadelphia Stock Exchange.

He was describing Cash Index Participations, a new product unveiled Thursday at a news conference here.Mr. Giordana said the exchange expects the Securities and Exchange

Commission to approve CIPs sometime in May.

The new stock index product will allow investors to participate in overall stock market movement, not unlike equity index futures and options on futures, but it will have no expiration period.

Futures and options are time-sensitive, Mr. Giordana said, while CIPs can be held indefinitely. It will have a 'perpetual' existence.

Mr. Giordana, however, said the CIP vehicles could complement, rather than compete with stocks and futures contracts.

The exchange president said the new products were specifically designed for individual investors whose confidence in the stock and stock futures and options markets have been shaken by the Oct. 19 market collapse.

Mr. Giordana said CIPs will pay dividends much like most of the blue chip stocks and will be provide a high degree of liquidity, since the products will have specialists who will make the markets.

In addition, a CIP contract can be bought at the same 50 percent margin as for stocks.

CIP shares are based on underlying indexes expressly constructed by the exchange for these products, but correlate highly with existing stock indexes, Mr. Giordana said.

Initially, the shares will come in two flavors. The Stock Market CIP is built to correlate closely with the Standard & Poor's 500-stock index, while the Blue Chip CIP will be based on an index of 25 stocks that closely correlates with the Dow Jones Industrial Average, Mr. Giordana said.

Investors are expected to be able to buy and sell CIP shares at any time during a trading session, but only on a quarterly basis will they only be able to cash-out, or liquidate when the CIP is at discount to the index, Mr. Giordana noted.

Dividends on CIPs shares will be transfered to longs (buyers) from short sellers and will be handled by the exchange's options clearing organization.

Mr. Giordana said by issuing dividends, the exchange is hoping the cash market and CIP vehicles will stay in line with each other.