New for Traders

New for Traders: BOX to offer jumbo options

Michael McFarlin
May 17, 2013 08:01 AM

Options

  • ISE’s appeal to list S&P 500 and DJIA index options has been denied by the US Supreme Court, who issued a short written order on Monday indicating its decision not to take up ISE’s appeal.
  • The BOX Options Exchange announced it received SEC approval to offer Jumbo SPY to its customers. SPDR S&P 500 ETF (SPY) is currently the most widely recognized ETF in the U.S. and tracks one of the most popular indexes in the world, the S&P 500 Index. Jumbo SPY Options are an options contract overlying 1,000 SPY ETF shares per contract, as compared to 100 shares per contract for standard options. 
  • MCX Stock Exchange introduced trading in futures and options on its flagship SX40 index starting May 15. These contracts are available for trading from 9:15am to 3:30pm from Monday to Friday, with the contracts to have a tick size of INR 0.05. The futures will be offered in a contract trading cycle of minimum of three contracts of maturity of one-month, two-month and three-month, and the options will have a monthly trading cycle of 3 serial monthly expiry contracts.

Commodities

  • CME will launch two new U.S. crude futures by year-end, to take advantage of the fast production growth in the US, according to Reuters.
  • The Nasdaq OMX Group, Inc. and World Steel Exchange Marketing, LLC announced a strategic partnership to develop financially settled steel and steel scrap futures products to be traded on the Nasdaq OMX Futures Exchange, Inc.
  • ICE will cut its electronic US grain trading hours from May 13 in response to feedback from customers, and in an effort to match CME’s reduced trading hours, according to Reuters. The new trading hours will see ICE begin at 5pm central time on Sunday and run till 1.30pm central time on Monday. For the rest of the work week, markets for crops such as corn, wheat and soy will trade from 7pm till 1.30pm central time.

Financials

  • Japan Exchange (JPX) will partner with Nikkei to develop a new Japanese index, which will consist of companies that are listed on the cash equity markets within the combined JPX. This will include companies from the TSE 1st Section, TSE 2nd Section, TSE Mothers, OSE 1st Section, OSE 2nd Section and JASDAQ markets.
  • LME will introduce LMEClear, its self-clearing platform, in 2014, and a launch date will soon be announced. LME COO Adrian Farnham said that “to go final on a date we need to agree an exit date with LCH.Clearnet. We’re close to agreeing that, we expect we’ll announce it in the next couple of weeks.”
  • Shanghai Stock Exchange launched trading of China’s first cross-border ETF, the Guotai NASDAQ-100 ETF, which allows Chinese investors to invest in Nasdaq-100 stocks.
  • NYX aims to lower access fees in an effort to increase more on-exchange trading. According to NYX COO Lawrence E. Leibowitz, “lowering that access fee in exchange for something that forced more volume to respect the public quote, I think would be exactly an appropriate trade off.”
  • BATS Chi-X Europe will be a recognized investment exchange from May 20, allowing it to host listings for the first time.
  • LSE will acquire Italian trading platform Eurotlx from Banca IMI and UniCredit for approximately EUR 40m ($52m), although “the agreement has been signed but not finalized.” Final approval from the Bank of Italy is required to complete the deal, in which two Italian banks will keep a small stake in the platform, as reported in Reuters.
  • MCX Stock Exchange introduced trading in futures and options on its flagship SX40 index starting May 15. These contracts are available for trading from 9:15am to 3:30pm from Monday to Friday, with the contracts to have a tick size of INR 0.05. The futures will be offered in a contract trading cycle of minimum of three contracts of maturity of one-month, two-month and three-month, and the options will have a monthly trading cycle of 3 serial monthly expiry contracts.

Technology

  • CQG, Inc. announced that it has connected its hosted infrastructure to the Dubai Gold & Commodities Exchange (DGCX) to deliver low-latency trade execution and market data service to its customers worldwide.
  • Nasdaq launched WorkSpace, a new cloud computing platform that will expand the company’s Corporate Solutions client base. WorkSpace is a fully-hosted, cloud-based solutions that protects all sensitive and proprietary information in real-time, both inside and outside of an organization’s firewall.

Forex

  • SGX will launch futures in the INR, SGX, AUD and the AUD/JPY cross in 3Q13, Reuters reported. According to SGX head of derivatives Michael Syn, “it’s playing to our natural geographical advantage that most of the key trading heads, the key price-makers and many of the key policymakers are based where we are matching and where we are trading.”

Regulations

  • CFTC voted 4-1 on the core rules regarding swap execution facilities (SEFs), and buyers will be obliged to request at least two bids when trading swaps for the first 12 months, after which it will later rise to three bids. The final rules will be effected 60 days after their publication in the Federal Register, and market participants will have 120 days to comply.
About the Author

Michael McFarlin joined Futures in 2010 after graduating summa cum laude from Trinity International University, where he majored in English/Communication. With the launch of the new web platform, Michael serves as web editor for the site and will continue to work on the magazine, where he focuses on the Markets and Trading 101 features. He also served as a member of the Wisconsin National Guard from 2007 to 2010. mmcfarlin@futuresmag.com