As from September 3 NYSE Liffe will introduce three new weekly options on high profile blue-chip shares: Aegon, KPN and Philips. After the successful launch of weekly options on ING Group, Royal Dutch Shell and ArcelorMittal in July, NYSE Liffe is now extending its offering of these unique products in Europe.
The key attraction of weekly options is that they cost less to trade than longer-dated alternatives. Generally the premium payable on short-lived weekly options is lower because its time value element is smaller. For the same reason they also offer greater leverage: even a small price movement in the individual shares can generate an attractive return. Therefore weekly options can benefit from the volatility of an individual share with short-term trading strategies.
Next to weekly options on individual stocks NYSE Liffe offers weekly and daily options on the AEX-index. With a monthly average of 829,400 lots (2010, until July) these contracts are the world’s most successful contracts of their kind. In the first four weeks of trading the weekly options on single stocks traded over 55,000 contracts.
Alan van Griethuysen, Business Head Benelux and Asia at NYSE Liffe said: “In its first weeks of trading, the latest product innovation from NYSE Liffe had a great response from investors. Because of the success of the launch of the first ever range of weekly options on single stocks in Europe, we are extending our offering. Investors will be able to execute short-term trading strategies on shares of even more underlying companies”.
Appendix
| Aegon N.V. | Koninklijke KPN N.V. | Koninklijke Philips Electronics N.V. | |
| ISIN-Code | NL0000303709 | NL0000009082 | NL0000009538 |
| Last Trading Day | |||
| First Friday of the month | 1AG | 1KP | 1PH |
| Second Friday of the month | 2AG | 2KP | 2PH |
| Fourth Friday of the month | 4AG | 4KP | 4PH |
| Fifth Friday of the month | 5AG | 5KP | 5PH |
• Introduced on Friday mornings before the start of trading, the
contracts will expire on the following Friday.
• If a fifth Friday exists in the month, there will be a fifth weekly
option contract as shown in the table above.
• The weekly options have the same contract specifications as the
existing monthly options on single stocks.
• American style and physical delivery of 100 shares.
• Initially, five in-the-money, one at-the-money and five
out-of-the-money series will be introduced.
• The weekly options are supported by the successful ‘full screen’
market model which gives investors access to competitive prices throughout the
trading day by ensuring a constant display of bid and offer prices,
thus improving on-screen liquidity.
