Eurex announced today that on March 10 it will launch 27 new options on French equities. The exchange made the announcement on Tuesday. This means the exchange will offer nearly all equities in the French benchmark index CAC 40 as options on the Eurex platform.
All French equity options will be available in two expiration cycles (third Friday of the month and month-end expiration). This means that Eurex participants will be able to trade the top German, Finnish, French, Dutch and Italian equity options on a single platform at the lowest possible costs. Deutsche Brse offers liquid trading in 18 underlying equities in the French benchmark index in continuous trading via Xetra.
All of the French equity options are to be supported by continuous market making, as is already the case in the Dutch segment: Market makers have a binding obligation to quote bid and ask prices in the order book on a continuous basis, and not just in response to quote requests. The most active participants will be rewarded by Eurex with an attractive fee model. For all French equity options tradable at Eurex, the smallest possible price movement will be one eurocent, which gives participants the most effective hedging opportunities in the trading of French equity options.
The existing and new French equity options will be available for trading with terms of up to 24 months (maximum lifetime). Moreover, Eurex makes a functionality available for block trades with a minimum order size of 250 contracts, so that larger trades are executed without risk.
The trading activity of Eurex clients in the segment for French equity options has increased considerably in recent months. In January, 60,000 equity option contracts on French blue chips were traded and cleared at Eurex. This is more than five times the number of contracts traded in January the year before (11,000 contracts). Eurex made significant gains in market share, peaking at 20 percent of the total market in terms of the nominal value of the equity options (nominal value of the transactions). Eurex posted as much as 50 percent of the volume traded in AXA equity options and up to 45 percent in L’ Oreal options; its share of the market in Carrefour and Total Fina ranged between 20 and 25 percent.
Trading in Dutch equity options has also continued to rise at Eurex as a result of new liquidity-boosting measures in July 2002 and the launch of new Dutch products on the same date. The exchange reported open interest of more than a million contracts for the first time in its Dutch segment. Over 20,000 contracts have been traded on a daily average in 2003. This corresponds to a market share of some 10 percent, with peaks as high as 20 percent, Eurex reported.