From the viewpoint of further enhancing the convenience of market participants, Osaka Exchange, Inc. (OSE) will introduce new options contracts on the Nikkei Stock Average (Nikkei 225) in addition to the current contracts, which expire on the second Friday (regular options), and has made the outline of the new options contracts (weekly options). Weekly options will be set so that they expire on Fridays on which there are no expiring regular options.
OSE will invite public comments on this matter. If you have any comments, please submit them to OSE as follows:
OSE sought public comments on the expansion of contract months for Nikkei 225 options from October 10, 2014 to November 8, 2014. OSE appreciates the cooperation of those who offered their comments in reviewing this matter.Please see the following comments on this matter and OSE's response.Following the results of the public comment, the revisions will be implemented as proposed.
Comment
Based on the current situation, if the stock price moves by just a few percent, it would already be more than JPY 1,000. Even if I traded the farthest contract out of the 8 strike prices, I would expect that it would quickly become in-the-money, where liquidity is comparatively lower. If OSE wants to provide an environment that is also accessible to office workers who can’t trade in the stock market during the day, to further increase participation, I would like to see 12 strike prices each above and below to further develop the trading environment. [Retail Investor]
OSE Response
Taking into account the opinion of market participants, OSE considers that the proposed revisions will prevent weekly contract liquidity from being dispersed in the early stages after contract launch. Therefore, OSE will implement the revisions as proposed. However, OSE will monitor the trading conditions and review the matter as necessary.
Comment
Disclosing trading volumes only for regular contracts and not for weekly contracts will lead to information asymmetry. We ask OSE to publish trading volumes of trading participants for weekly contracts in the same way as for regular contracts. [Rakuten Securities, Inc.]
OSE Response
In consideration of the burden of reporting work at trading participants, OSE will, as proposed, not publish trading volume of weekly contracts by trading participants. However, OSE will monitor the trading conditions and review the matter as necessary.
Comment
Due to the extremely short lead time to contract launch, in light of system development and various other aspects, the schedule is tight and the cost is high. Considering the launch date, we ask OSE to consider offering an incentive program. [Rakuten Securities, Inc.]
OSE Response
Changing the date for contract launch will have a large impact on other market participants that are making similar preparations, therefore, OSE will implement the revisions as proposed. However, to quickly secure a wide range of participants after contract launch, OSE will offer a trading fee discount campaign for weekly contracts to all participants for a limited period of time.
