CHICAGO, FEB. 9 -- The Chicago Board Options Exchange said today it will oversee a plan to refund up to $2 million to as many as 200 customers who sustained heavy losses in the nation's largest stock-index options market last October.

The exchange will raise the money by charging floor traders in its index options pit a transaction fee, then distribute the funds among brokerage firms that have complained they were overcharged for options contracts on Oct. 20, the day after the stock market collapsed, said CBOE spokesman Warren Moulds.

Details of the plan were still being negotiated, Moulds said this afternoon.

Trading losses in index options on Oct. 19 and Oct. 20 have been estimated at several hundred million dollars nationwide.

Index options were one of the largest sources of investor complaints in the weeks after the 508-point drop in the Dow Jones industrial average on Oct. 19.

Index options, which account for more than half the trading volume at the CBOE, are hedging tools used by investors to protect themselves against losses in the stock market.

Most of the index options floor traders at the CBOE are independent traders called market makers, who charge brokerage firms a fee, or premium, to execute their trading orders, Moulds said.

On Oct. 20, as stock prices gyrated wildly, the floor traders doubled and tripled the premiums on index options.

The CBOE concluded after a study the high prices were understandable.

But by agreeing to the refunds, the traders effectively acknowledged that the premiums were excessive despite the unprecedented swings in stock prices, the Wall Street Journal said today in a story about the refunds.

"The exchange is merely acting as a facilitator or coordinator for the market makers in the crowd that will be making the refunds back to the brokerage firms," Moulds said.

Trading volume in index options at the CBOE has plunged about 60 percent since the collapse, and the exchange has reduced its staff by about 10 percent.

The refunds are designed to restore investor confidence in index options, the Journal said, citing unidentified industry officials.

The refunds are planned for customers who traded nine specific series of options on the Standard & Poor's 100-stock index for November delivery on the morning of Oct. 20, the newspaper said.