The Chicago Mercantile Exchange (CME) will launch new euro FX and Japanese yen options contracts, with European-style expiration, on its Globex platform in April. The Merc already offers these contracts with American-style expiration via open outcry and during a limited Globex trading period.
The launch means these contracts will be available nearly 24 hours a day, and will trade side by side with the open outcry markets. In similar fashion to its FX futures, CME says it will offer connectivity to a select group of automated market makers for these new options.
The contracts will be listed on Sunday, April 3, at 5:00 pm on CME Globex and in the open outcry market on Monday, April 4, at 7:20 am.
“CME FX futures and options, which last year traded $6.2 trillion in notional value, are a rapidly growing part of the overall FX market,” says Rick Sears, managing director, CME Foreign Exchange. “Last year, our total FX volume grew more than 50%, and our electronic volume was up 128% from the prior year. Now for the first time, investors will be able to trade our futures and options off the same electronic platform nearly 24 hours a day. In addition, offering the choice of European-style expiration, as well as American-style expiration, allows our investors flexibility in determining investment strategies and also provides alternative tools that are more in line with the OTC market. These new FX options, as well as other initiatives such as our distribution partnership with Reuters that will allow traders to move seamlessly between the spot and futures markets, further increase the value of our risk management products.”
CME’s Euro FX and Japanese yen futures and options contracts are among the exchange’s most actively traded FX contracts. Average daily volume in Euro futures and options was 86,757 in 2004 and 31,070 in Japanese yen futures and options.