Listed options referencing seven Source ETFs can know be traded on Eurex. The new contracts are based on six STOXX Europe 600 Optimised Supersector Source ETFs – Banks, Basic Resources, Industrials, Oil & Gas, Telecommunications and Utilities as well as the STOXX Europe Mid 200 Source ETF.
Nomura, whose focus on electronic connectivity and high velocity trading makes them particularly well positioned to support this initiative, will act as market maker in order to inject liquidity into the order book.
“We are very excited by this new development for our products,” says Ted Hood (pictured), CEO of Source. “Source’s efforts to deliver enhanced indices, improved structures and more active trading have clearly resonated well with the European investor community, creating the liquidity required for our products to become reference assets for options.”
The underlying optimised sector indices were created by STOXX and Source to deliberately enhance trading liquidity by addressing concentration and securities lending concerns. Greeks and Icelandic stocks are removed from the indices as well as the 30 least liquid stocks. Up to 30 additional names are also removed due to persistent lack of available shares to borrow in the stock lending market.
Since their launch in July 2009, Source Optimised Supersectors have gained increasing popularity, capturing 20 percent European sector ETF market share and over 75 per cent of total European sector ETF Cascade turnover since February 2010.
