Eurex to Introduce Further Options on ETFs

New contracts will be based on ETFs issued by Source/ Launch on 1 June 2010

The international derivatives exchange Eurex announced today that it will list seven new options on Source ETFs on 1 June 2010. One new contract will be based on the STOXX Europe Mid 200 Source ETF, the further six options will be based on the STOXX Europe 600 Optimised Supersectors Source ETFs covering the sectors Banks, Basic Resources, Industrials, Oil & Gas, Telecommunications and Utilities. The launch of the new ETF options will complement the recently introduced options based on three benchmark index ETFs.

“Sector and size indices have become more important in the asset allocation of institutional investors, which is reflected in the strong asset growth in respective ETFs”, said Peter Reitz, member of the Eurex Executive Board. “With this extension of our range of ETF derivatives we will offer ETF and derivatives users innovative means to further fine-tune and manage their investments.”

“Fundamentally, options markets need highly liquid reference assets. This has historically posed a challenge to trading options on European ETFs. We were very pleased when Eurex highlighted the trading volumes in our sector ETFs and suggested to launch options. In the lead up to the launch, client feedback was very positive and we look forward to the start of trading”, commented Source’s CEO, Ted Hood.

The new ETF options will be traded in euro, physically settled (American-style) and have maturities of up to 24 months. The contract size will be 100 units.

Nomura will act as a market maker to support liquidity in the order book. “Nomura is delighted to be the first market maker for options on Source ETFs”, commented Rob Heck, co-head of flow derivatives single stock trading at Nomura. “It’s a natural extension for Nomura to offer this innovative service and underlines our commitment to be a top liquidity provider in the derivatives space.”

The underlying Source ETFs are listed in the XTF segment, Deutsche Börse’s ETF trading segment. Since its launch in April 2000, the XTF segment has been the leading trading venue for exchange-traded funds in Europe, with 669 listed funds and a market share of approximately 38 percent by European ETF turnover.