The Chicago Mercantile Exchange and the International Securities Exchange are both making changes to their FX options product line.

Beginning Dec. 18, the CME will offer electronic trading of nine currency options at the same time the products are traded on the floor. The Euro FX, Japanese yen, British pound, Swiss franc, Canadian dollar, Australian dollar, New Zealand dollar, Mexican peso, and Russian ruble options will be available almost 23 hours per day on the CME’s Globex system. Additional forex options will be added in 2007.

While almost 90 percent of overall forex volume at the CME is done electronically, only a small percentage of forex options volume is done off the floor. Derek Samman, managing director of foreign exchange for the CME, says electronic trading of forex options grew 81 percent in the third quarter, and that growth rate should increase with side-by side trading now available.

The CME’s forex options are American-style, meaning they can be exercised at any time before expiration. Meanwhile, while the ISE will not begin trading forex options until 2007, it has begun disseminating the underlying data for the products, allowing users to have a better idea of what prices will be when the products begin trading.

Rates are available for options on the euro (EUI), British pound (BPX), Japanese yen (YUK), and Canadian dollar (CDD), and can be accessed from many data vendors and financial Web sites, including Bloomberg, Reuters, and Yahoo! Finance.

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