blackcap
16-04-2014, 07:24 PM
Following my post on the XRO thread (from memory) I have called the NZX to enquire when their options and derivatives markets are going to open and some more details. https://www.nzx.com/Derivatives
Last year the website stated they hoped to have it up and running towards the end of 2013. This has off course lapsed but they are now saying they are hopeful that they will have it started by the end of this year. There are certain regulatory and operational barriers that need to be surmounted first. Following I have paraphrased and cut and pasted portions of an email received from the NZX:
In the initial suite of products we will be rolling out equity options (puts & calls) on Telecom, Fletcher Building and Trade Me which will be american style (exercisable at any point up to expiration) and physically delivered. One option representing 100 of the underlying stock. We will also be launching a NZX20 index with each contract valued at NZ$25 per index point (e.g. value NZ$75,000 at 3,000 index points) which will be cash settled. The launch of the index future will precede the launch of the equity options.
NZX20: correlation around 99% to NZX50
We are also looking at listing a European option on the index post launch.
p.s - contract specs are available online
https://nzx.com/files/static/cms-documents/Equity%20Options%20Contract%20Specification%20FINA L.pdf--
https://nzx.com/files/static/cms-documents/NZX20%20Index%20Futures%20Contract%20Specification %20FINAL.pdf
Soif I am reading this correctly we will have a futures and options on an index and three of the top stocks initially. More shares would be added to the mix if demand was there so we could see for example, XRO, FPH, AIA, etc and others if demand dictated that this would work. I am curious as to which brokers are going to offer these products but I do think OM Financial are poised to enter this market.
Last year the website stated they hoped to have it up and running towards the end of 2013. This has off course lapsed but they are now saying they are hopeful that they will have it started by the end of this year. There are certain regulatory and operational barriers that need to be surmounted first. Following I have paraphrased and cut and pasted portions of an email received from the NZX:
In the initial suite of products we will be rolling out equity options (puts & calls) on Telecom, Fletcher Building and Trade Me which will be american style (exercisable at any point up to expiration) and physically delivered. One option representing 100 of the underlying stock. We will also be launching a NZX20 index with each contract valued at NZ$25 per index point (e.g. value NZ$75,000 at 3,000 index points) which will be cash settled. The launch of the index future will precede the launch of the equity options.
NZX20: correlation around 99% to NZX50
We are also looking at listing a European option on the index post launch.
p.s - contract specs are available online
https://nzx.com/files/static/cms-documents/Equity%20Options%20Contract%20Specification%20FINA L.pdf--
https://nzx.com/files/static/cms-documents/NZX20%20Index%20Futures%20Contract%20Specification %20FINAL.pdf
Soif I am reading this correctly we will have a futures and options on an index and three of the top stocks initially. More shares would be added to the mix if demand was there so we could see for example, XRO, FPH, AIA, etc and others if demand dictated that this would work. I am curious as to which brokers are going to offer these products but I do think OM Financial are poised to enter this market.