The American Stock Exchange sued the Commodities Futures Trading Commission yesterday over a CFTC proposal that effectively would bar the stock exchange from trading commodity-related options.

In a suit filed in U.S. District Court in New York, the Amex charged that CFTC regulations proposed Tuesday are arbitrary, capricious and an abuse of the agency's discretion, and the stock exchange asked the court to bar the agency from implementing them.

The CFTC approved proposed regulations Tuesday for a pilot program in options trading expected to begin some time next year which will allow each of the nation's commodity markets to offer options on futures contracts for one commodity each (other than a U.S.-grown agricultural product). The commodities markets may offer options only on commodities in which they already deal.

The Amex had told the CFTC that it hoped to sell through a new wholly owned subsidiary options based on commodities themselves rather than futures, something that would not now be allowed. The Amex also would be precluded from offering the types of options outlined by the proposed regulations since it has no futures contracts upon which to base options, said Fred Stone, senior vice president for legal and regulatory policy for the stock exchange.

The difference between a commodity option and a futures contract on a commodity is that a futures contract gives the investor the obligation -- not just the right -- to buy or sell the commodity. Options, as the name suggests, give the investor the right to buy or sell a specified amount of a commodity on a future date at a predetermined price but do not obligate the investor to do so.

The options regulations proposed by the CFTC are now before Congress, which has 30 working days to review them. If Congress takes no action, they go into effect unless the court acts to bar them.