The migration to screen-trading marks the implementation of a quote-driven market model for options in a screen-trading environment. Quotes at which orders can be executed are continuously available, which ensures a liquid market and transparent pricing. The model also includes competitive market makers (CMMs), which safeguard liquidity and enhance it where possible. CMMs are required to continuously quote bid and ask prices for the option classes to which they are assigned, in return for which they are granted a fixed percentage of each transaction that is executed at a price they quoted. This system ensures that there are always prices available at which both private and institutional investors can trade.
More option classes will migrate to screen trading after the February 2002 expiration.
The screen-trading migration is part of Euronext's strategy for introducing a single market model for equity options. Experience gained from this project will be used to determine the trading model that Euronext will implement throughout its equity options market.
Options have been traded in open outcry on the exchange floor in Amsterdam since 1978, when option trading started in the Netherlands. By the end of 2002, all products listed on Euronext Amsterdam's derivative markets will be traded in a fully computerised environment.
