Trader in weekly stockoptionsA new year brings new rounds of innovation at Euronext Liffe. The weekly options in the single stocks will be expanded to half a dozen other stocks. Currently this market segment of weekly equity options is more or less a ghost town. Not much volume going on – the high transaction costs block serious trading opportunities in here.

Currently we have weekly stock options in ING, KPN, Royal Dutch, Aegon, Mittal and Philips. These aren't just different maturities, it's an own option class. So you can't set up a time spread between the weekly and monthly options – other than trading the legs separately. Makes everything cumbersome for market makers too.

Starting January the 31 – this friday – this unsuccessful line will be expanded to the following seven stocks.

  • Ahold (code AH)
  • Akzo Nobel (code AK)
  • ASML (code AS)
  • DSM (code DS)
  • Heineken (code HE)
  • SBM Offshore (code SB)
  • Unilever (code UN)

Market maker have a few days to sign up. Don't expect any queues here. It's also safe to wait a few weeks to check if it's worth the effort (uhm, don't think so).

Capacity issues solved

The exchange has silently adjusted their business model for market makers. In the good old days, only a very few primary market maker spots were available. Always good for some play offs, with market makers competing for the tightest quotes with the largest size to win the battle. I even remember a now bankrupt trading firm valuing these market maker licenses for millions in their books.

As of 2014, any market maker can sign up for PMM. All capacity constraints are apparently gone, these quoting licenses come with unlimited supply.

Source : Notice from Euronext Liffe (pdf)

 

Jack
Jack