Nasdaq has launched weekly equity options expirations for the largest Stockholm-listed stocks to cater for a growing demand of shorter-term exposure among investors.
The contracts allow for more flexibility and the ability to act on or hedge short term events, either macro-driven or relating to single companies.
The move follows a similar introduction from Euronext, where the European exchange began listing weekly options for the CAC40 and AEX indices.
CBOE also rolled-out short-term Volatility Index options in the US earlier this year as investors look to manage near-term risk. Other equity derivatives markets in European such as Liffe and Eurex offer similar contracts.
“For investors, they are able to get more granularity with the expirations and can fine-tune their hedging,” said, Alessandro Romani, vice president of derivatives products, Nasdaq Nordic. “Weeklies are also a less costly option than the monthly expirations.”
Nasdaq launched index options with weekly expirations in 2012 and has been monitoring demand before the launch of single stock options. The exchange has subsequently launched 13 weekly contracts, with trading fees waived until the end of November.
The Scandinavian platform has also onboarded market makers in recent weeks for the products.
“The demand is relatively new, but in the US weekly options have been there for some time and have been representing the strongest growth in that market.
“I think we will see the uptake from institutional investors depending on how liquidity will build up over time.”