In order to enhance liquidity in the options market and provide a wide range of investors greater convenience to trade options, Tokyo Stock Exchange, Inc. (TSE) has decided to make significant changes to its trading rules for option contracts. These changes will include the introduction of a Market Making System, a familiar concept in overseas markets. The changes will be implemented in conjunction with the transition to the new trading platform (Tdex+) for all listed options (i.e. individual securities options, index options, options on JGB futures).
The Tdex+ system is a new trading platform that was developed based on LIFFE CONNECT®. This platform is used on one of the largest derivative exchanges in Europe, also known as LIFFE. System performance and capacity will be dramatically improved by the launch of Tdex+.
The TSE will implement a Market Making System so that investors can find fair prices easily, regardless of what option contracts they want to trade. In addition, options strategy trading, which is a combination of multiple options series, will become available. This will allow investors to fully utilize the most attractive features of options trading, that is, its wide variety of investment strategies.
The TSE anticipates that these changes to the options trading rules will make the market more convenient and efficient. We also expect that options trading, which is already a popular investment tool overseas, will become popular in the Tokyo market as well.
The aforementioned changes to the trading rules will be implemented in July 2009 at the same time that the Tdex+ system is activated.
Major Change
- Introduction of Market Maker System
- Introduction of Strategy Trading
- Introduction of Request for Quote
- Other revisions to the trading rules in accordance with trading rule international standards (Revision of trade execution rules, order variation, introduction of the Dynamic Price Range) etc..
