Euronext is further expanding its derivatives business with the launch of “Spotlight Options” on its Paris market.
The spotlight platform, which launched in Amsterdam and Brussels in July 2014, offers short-term contracts of one to three months referencing medium and smaller sized companies as well as newly listed stocks.
The Paris launch will initially include eight underlyings; Coface, Elior, Elis, GTT, Numericable, Tarket, SPIE and Worldline, all of which completed their initial public offerings in the last two years.
The market, which was designed by Euronext to provide more visibility into smaller firms, sees new contracts created at the request of market participants.
“This is an important initiative from Euronext to enhance its derivatives offering, allowing investors to enlarge their option portfolio in our transparent, regulated and cleared trading environment,” said Adam Rose, head of financial derivatives at Euronext.
“We are already seeing significant growth in this segment in Amsterdam and Brussels, with increasing volumes and open interest; almost 200,000 lots have already been traded since launch.”
Successful contracts can see further maturities added and those that see strong liquidity can make the shift to become mature option classes on the bourse’s main options segment.
In May of this year, Altice became the first to make that shift when its Spotlight options were promoted to the standard segment. BE Semiconductor and Euronav followed suit in September.
Liquidity in the new instruments will be supported by Susquehanna International Securities which will act as a market-maker, providing onscreen bid and offer prices throughout the trading day.
“We always welcome the expansion of the options available for trading in Europe,” said Cathal Hardiman, options sales trader for Susquehanna.
“Liquidity is essential for the growth of new products and we will be providing both on-screen liquidity by publishing two-way prices during market hours and off-screen liquidity by making prices to clients who contact us directly.”
Extension to the Paris market sees 23 spotlight classes now available for trading across the three jurisdictions.
