Weekly options for Mittal, ING and R2D2
The weekly and daily options on the AEX index are extremely popular, and Euronext decided to have a go at weekly options in the equity single stocks. Onwards from July 16th we will be trading weekly’s on Mittal, ING and Royal Dutch Shell (RD). The basic idea is pretty similar compared with the AEX weekly options. However, there are a few small differences.
Just like in the index, the weekly options in the single stocks won’t be just a new maturity in the regular options. It will be a separate class, called 1RD, 2RD, 4RD and if applicaple 5RD – with the number for the first friday, the second friday etc. For obvious reasons there won’t be a new class for options expiring the regular third Friday. Except some extra useless series in expiration week, though.
The reason for introducing these weekly’s as a separate class isn’t to bully investors (who can’t roll over their positions with simple time spreads). Systems at several institutions monitor options with a four digit maturity code (“1212” for Dec ’12) and hence lack the flexibility to include the weekly maturity schedule. Sounds like the Y2K problem.
We will witness tight spreads, low absolute values and regular early exercise options. Nice as well are the dividend games to be expected a few times a year. All current liquidity providers can join as primary market maker in the new classes. There won’t be any competitive market makers selected.
Hard to say whether or not this single stock options will become a success. For retail investors the transaction costs are killing them with these low priced options. They need a real home run to make some profit. Euronext should have cut the transaction fees for investors to bring this 4MT, 4IN and 4RD markets alive.
first ?
who cares anyways ..
for being first to comment that is !
2nd
lets say week-options are 1/4th of a month… is Euronext then also gonna divide the transaction costs by 4??
yes,
I'm afraid this was a retorical question.
Trading weekly aex options make sense for retail investors. Prices move very fast and in big steps. In the single stock weekly options, you need a LARGE jump to make money. Just being right and the price doubling from 5 to 10 cent doesn't earn you anything : transactions costs eat away all the profit!
first posts only count if they are not anonymous
Since last friday some USA stock options and ADR trading in USA has been listed weekly options (like BP ADR's). Not much volume.
Us usual, Euronext has noy spoken with the market makers about the listing of weekly stocks options,prior doing.
In my opinion it does not make sense…but let's see
yah, agreer single stock vs aex .. aex is 330, so movement can cover the fixed transaction cost .. ING is 7.5 .. the movement is not going to cover the fixed cost .. is this too hard for the exchange to grasp ?
Re: "first posts only count if they are not anonymous"
i cudnt be bothered putting a name to it ..
as i said ..
who cares anyways ..
for being first to comment that is !
i say bullshit, make single stock futures i think that would be more interesting… although i wouldn't trade it
There already exist single stock futures, dimwit.
..but nobody trades these things, except the dividend stripping firms in the prof market.
"There already exist single stock futures, dimwit."
I meant in stead of the daily options dimwit, in US you have futures for everything
is there a single stock future on ING ?
ING single stock future vs weekly option is same as AEX future vs weekly option ..
it caters to different pay-off that a punter is looking for .. u cant replace one with another really ..
though i agree future liquidity should be a starting point rather than trying for liquidity in options which are inherently expensive to trade and risk manage…
http://www.euronext.com/trader/landing/landinguniversalstockfutures-2731-EN.html?instrumentType=9&instrumentSubType=901|915
Look at the great volumes!
Mind you : you get a fee penalty if you sell an ITM call in the expiration week with these Weekly's 😉
actually low interest in trading single stock future (SSF) makes sense .. the natural buyer and seller in physical stocks are really the institutional investors who have huge cash to deploy .. only small retail punters or HF/trading company with little capital would want to go for SSF .. so no real trading interest and its not worth any effort quoting it and so its effectively dead ..
comming up: HUGE OPEN-INTEREST in the itm-calls in the weekly-options… fine them!! those money-grabbing marketmakers.
they need to post options in all options and imc. then there would be lots of volume, especially in the put strikes
put strikes???
downside strikes obv .. dont u have anything better to do than correct a small misnomer ..
yes very tiny out of the money put strikes. would like to buy a lot!
can you dig it?
give me some otm calls in IMC…
to expire otm you mean?! 😉
every otm call strike in imc and all options is offered at cab
"Utterly boring insulting crap just runs the risk of ending in the trashcan"
what happened, all this shit above is not getting deleted ?
no you have to say something like all options and saen are run by criminals to get deleted- the truth hurts
well they could be oldskool assholes, but what makes u call them criminals ?
any kind of opties available on any dutch market maker or basket of MMs on Dutch exchange ? let me know, will like to trade some of them..