The International Securities Exchange (ISE) and NYSE Euronext (NYSE Euronext: NYX) announced today that they have entered into an agreement to license the right to list ISE FX Options® products on the NYSE Arca Options platform. This allows NYSE Arca Options to trade options on all currency pairs traded at ISE. The unique, dollar-based structure of ISE’s FX options creates an underlying value similar to traditional equity or index options and provides investors with a simple tool to trade their views on the strength of the U.S. dollar in relation to foreign currencies. NYSE Arca Options began trading options on the first of six currency pairs, the U.S. dollar/euro (Symbol: EUI), on Monday, October 27, 2008. The products are fungible with ISE’s existing FX options contracts.
“We are very excited that, in partnership with NYSE Arca, we are extending the reach of FX options to a wider range of market participants,” said Kris Monaco, director of New Product Development at ISE. “All investors who currently trade FX options at ISE will benefit from this collaboration as it allows us to attract more investors to the market, thereby deepening the available liquidity in these products.”
“Adding FX options to our platform demonstrates our commitment to providing investors with access to a diverse suite of options products that span multiple asset classes,” said Edward Boyle, senior vice president, NYSE Arca Options. “The innovative structure of these products will allow investors to easily apply the trading strategies they currently use for equity and index options to FX trading.”
In the coming weeks, NYSE Arca will list all FX options contracts traded at ISE: the U.S. dollar/euro (Symbol: EUI), the U.S. dollar/British pound (Symbol: BPX), the U.S. dollar/Japanese yen (Symbol: YUK), the U.S. dollar/Canadian dollar (Symbol: CDD), the U.S. dollar/Australian dollar (Symbol: AUX) and the U.S. Dollar/Swiss franc (Symbol: SFC).
ISE calculates the underlying values for FX options using data supplied to it through an agreement with Reuters and disseminates it through several leading market data vendors and financial websites. As exchange-listed securities, FX options can be easily accessed through most major brokerage accounts that are approved for trading equity and index options. These products are cash settled and have European style exercise.