These changes are part of Euronext.liffe’s on-going programme to harmonise its equity derivative products wherever possible and will bring the contracts in line with Euronext.liffe’s other continental derivatives markets as well as with international standards.
Each index point is now worth €10 for the new larger size CAC 40® index option contract, compared to the original contract which is worth €1.
From 20 June Euronext.liffe will introduce American style exercise French individual equity options (“IEOs”) with a contract size of 100 shares (current French IEOs have a contract size of 10 shares). By 19 December 2005, only American style French IEOs with a contract size of 100 shares will be available for trading, as all 10 share contracts will have expired by this date.
To coincide with the introduction of the 100 share contracts, Euronext.liffe has again demonstrated its commitment to drive down the cost of trading by announcing an 8% reduction on trading fees for managing the equivalent equity exposure. This is in addition to the average 25% fee reductions for trading IEOs made in November 2004.
Fraser Cowie, Executive Director of Marketing at Euronext.liffe, said: “This is one of the final steps in our programme to harmonise and simplify our equity products wherever we can. Over the past couple of years we have migrated trading onto a single platform, introduced a single corporate events policy, moved all contracts to a standardised specification and reduced trading fees for individual equity options by an average of 25%. All of this means that trading equity derivatives across much of Europe is now far simpler and cheaper than before.”
The effect of both changes means that customers will be able to trade one contract, where previously they would have needed to trade ten to achieve the same exposure.
To make accurate year-on-year trading comparisons easier, from next month, the volume statistics will also include rebased figures.