The traded volume in the options with maturities of one week in the single stocks isn’t very exciting. For example, the volume in ING’s weekly options yesterday was 875 contracts, which is nothing compared to the 50.000 contracts in the regular ING options. For the weekly options on Royal Dutch the situation is even more bizarre : not a single contract traded yesterday. Nothing. Zero. Tuesday was only marginally better with a volume of 21 contracts.

Anyway, this won’t stop Euronext in introducing even more weekly options on single stocks. The lucky winners this time are Aegon, Philips and KPN. Enter the new abbreviations AG, PH and KP. These weekly options will start September 3rd.While it’s hard to imagine a trading volume thinner than the weekly Royal Dutch options, the volume will be not worth mentioning. I’m afraid in a few months time we will be witnessing daily options in Mediq, Wavin and Draka. Introducing new classes is free of charge for Euronext.

Retail investors should stay far away from this kind of low-priced weekly stock options, as the fees will eat all their profits. It’s not the retailbrokers like Binck and Lynx who are to blame for the high transaction costs : it’s Euronext who is reluctant to cut their fee levels for investors. As long as the the transaction costs are out of proportions, the weekly single stock options will remain dead. Euronext runs a smooth operation with one department creating new option classes, and other departments make sure there won’t be any trading at all. Some people within Euronext must hate each other.

Jack
Jack