NZX is pleased to announce that following approval by the Financial Markets Authority, NZX equity options are expected to launch on 24 April 2015.
Equity options are another step in the development of New Zealand’s capital markets, and follow the introduction of the NZX20 Index futures contracts in June 2014.
Equity options are very well traded globally and are flexible investment tools that allow investors to manage risk, hedge their portfolios and add income.
NZX will initially launch option contracts based on Fletcher Building Limited Ordinary Shares (FBU), Spark New Zealand Limited Ordinary Shares (SPK) and Trade Me Limited Ordinary Shares (TME). We plan to offer options on more stocks in the future. One option contract will confer on the buyer the right, but not the obligation, to either buy or sell 100 ordinary shares in the underlying company, depending on the type of option.
The path to launch has included extensive consultation and planning with a range of external stakeholders both in New Zealand and internationally.
NZX CEO Tim Bennett commented: “The development of an equity derivatives market is of significant importance to ensure the long term viability and success of New Zealand’s capital markets, offering a vital risk management tool for institutional and retail investors alike.”
The equity options market will be supported by First NZ Capital Securities Limited, as an accredited NZX Derivatives Market Trading and Advising Firm providing trading and execution services and BNP Paribas Securities Services SCA (a global custodian and securities services provider) as an accredited General Clearing Participant, Legal Title Transfer Depository Participant, and Depository Participant providing clearing services.
To learn more about equity options, please visit the NZX Derivatives section on the NZX website nzx.com/derivatives
