Eurex to further expand its equity options offering covering UK equities

Eurex to further expand its equity options offering covering UK equities

15/12/09

The international derivatives exchange Eurex announced today that it will launch new equity options based on 30 of the most liquid British stocks on 18 January 2010. With this new product suite, Europe’s largest derivatives exchange for the first time will also offer British pence denominated equity options with home market settlement. The new UK equity options will be physically settled in the Crest system of Euroclear UK & Ireland.

Peter Reitz, member of the Eurex Executive Board, said: “This launch represents an important step in our strategy to continuously expand our product offering with new contracts. The new UK equity options extend our broad coverage of the Dow Jones STOXX 600® index components. We provide our customers with extended cross margining opportunities as we offer trading of all the major European blue chips derivatives on one platform. UK equity options will enable our customers to better hedge their exposure to the UK equity market and will simultaneously offer new trading opportunities.”

The new options will be denominated in GB pence and physically settled in the Crest system of Euroclear UK & Ireland. Eurex and Eurex Clearing have been officially recognized by statutory instruments as financial intermediaries in the UK and will thus be exempted from SDR taxation (stamp duty). Further the customer business of all Eurex Clearing members will also automatically be exempted.

The new suite of options will have maturities of up to two years. To support order book trading, a market making scheme will be initiated to ensure on-screen liquidity. During the first eight months of trading, supporting market makers can qualify for a 50 percent revenue sharing program lasting for two years. Trading hours will be from 9:00 am until 5:30 pm CET.