The International Securities Exchange (ISE) and NYSE Euronext (NYSE Euronext: NYX) sign the agreement to license the right to list ISE FX Options products on the NYSE Arca Options platform.
The contract allows NYSE Arca Options to trade options on all currency pairs traded at ISE. Dollar-based structure of ISE’s FX options creates an underlying value similar to traditional equity or index options and provides investors with a simple tool to trade their views on the strength of the U.S. dollar in relation to foreign currencies. NYSE Arca Options began trading options on the first of six currency pairs, the U.S. dollar/euro, on Monday, October 27, 2008. The products are fungible with ISE’s existing FX options contracts.
In the coming weeks, NYSE Arca will list all FX options contracts traded at ISE: the U.S. dollar/euro (Symbol: EUI), the U.S. dollar/British pound (BPX), the U.S. dollar/Japanese yen (YUK), the U.S. dollar/Canadian dollar (CDD), the U.S. dollar/Australian dollar (AUX) and the U.S. Dollar/Swiss franc (SFC).
As exchange-listed securities, FX options can be easily accessed through most major brokerage accounts that are approved for trading equity and index options. These products are cash settled and have European style exercise.
“All investors who currently trade FX options at ISE will benefit from this collaboration as it allows us to attract more investors to the market, thereby deepening the available liquidity in these products,” says Kris Monaco, director of New Product Development, ISE.
“Adding FX options to our platform demonstrates our commitment to providing investors with access to a diverse suite of options products that span multiple asset classes,” says Edward Boyle, senior vice president, NYSE Arca Options.
L.D.