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Total volume in its AEX-index daily and weekly options has now passed 20 million contracts, NYSE Liffe said today. Designed with short-term trading strategies in mind, the contracts were launched in March 2008 and May 2006 respectively and are traded on the Amsterdam market.
The key attraction of daily and weekly options is that they cost less to trade than longer-dated alternatives. Generally the premium payable on short-lived daily and weekly index options is lower because its time value element is smaller. For the same reason they also offer greater leverage: even a small movement in the AEX-index can generate an attractive return. Investors can choose from a full range of AEX-index option lifetimes ranging from one day to five years, a choice that is unique in Europe.
The short term option contracts were developed in close cooperation with market participants. Hans Pieterse, Managing Director, Optiver Europe said: “The volumes in daily and weekly AEX options confirm the model by which liquidity providers like Optiver, flow providers and NYSE Liffe have worked together to provide successful and transparent products for investors.”
Alan van Griethuysen, Business Head Benelux and Asia of NYSE Liffe added: “We want to thank our customers for helping us reach this milestone, which means that we can justly claim that our short-term equity index options contracts are the most successful in the world. The fact that almost 40% of the turnover in these innovative markets comes from private investors shows that these contracts meet the needs of all investors. We are therefore considering broadening the range of short-term products we offer.”
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