Eurex, the international derivatives exchange jointly owned by German exchange group Deutsche Börse and SIX Swiss Exchange, is to launch stock-specific equity options with weekly expirations from 24 January 2011.
This is the first time that single-stock equity options contracts with a weekly maturity will be available on Eurex. The Eurex Weekly Equity Options will be listed as separate contracts and will initially comprise derivatives based on shares of Daimler, Deutsche Bank, Deutsche Telekom and Nokia (four per underlying stock).
Eurex will offer Weekly Equity Options for the first, second, fourth and fifth Friday of each month, complementing the standard equity options series, which expire on the third Friday of each month. All other contract specifications will correspond to those of Eurex's existing equity options.
Weekly options have been available on the EURO STOXX 50 and DAX indices since April 2006, with more than 2.6 million contracts traded during 2010.
“EUROSTOXX and DAX have been very successful in terms of traded volumes,” said exchange spokesman Heiner Seidel. “Based on customer feedback, we now extend weekly options to further stocks. This is ideal for investors with a short-term expectation.”
Siedel acknowledged that weekly stock-specific equity options were already available on the OTC market. “What we are offering is an order book version,” he said. “We have a market-maker in place to provide quotes. If you need an exposure for one week or two weeks, you can now cover it with the new instruments.”
Eurex also plans to introduce a new pricing model on 1 February 2011, which will include lower transaction fees for a number of key index options, single equity options and single stock futures as part of a strategy to increase volumes and attract new customers to the exchange.
The London Stock Exchange is expected to introduce equity derivatives trading functionality in Q2 this year on its multilateral trading facility Turquoise, in a bid to compete with Eurex and NYSE Liffe, owned by NYSE Euronext. Meanwhile, Nordic venue Burgundy has received approval from Swedish regulator Finansinspektionen to operate its market as an exchange, enabling it too to list and trade derivatives.