NYSE Euronext introduces GBP/USD and GBP/EUR derivatives

In keeping with announcement this article will be entirely derivative.

NYSE Euronext has began listing GBP/USD and GBP/EUR options and futures on its market in Amsterdam. The new introduction means an extension of NYSE Euronext’s European range of foreign exchange derivatives, which until today included EUR/USD options and futures.

In a statement the exchange argued that “The new FX options and futures are interesting for retail and professional investors who wish to invest in currency derivatives without being exposed to physical deliver”. These contracts form the base for a good currency risk hedge for equity portfolio’s containing UK or US shares as the contracts are cash settled”.

The underlying value of the GBP/Euro options is GBP 10,000 and exercise prices and premiums are in Euros, whilst the underlying value of the GBP/USD options (trading symbol: PDX) is GBP 10,000 and exercise prices and premiums are in US Dollars. The unit of trading will be 100 for all new products. The underlying value of the GBP/Euro futures (trading symbol: FPE) is GBP 10,000 and prices are quoted in Euros an the underlying value of the GBP/USD futures (trading symbol: FPD) is GBP 10,000 and prices are quoted in US Dollars.

Both the options and the futures will have initial lifetimes that range from 1 to 12 months with the bast day of trading being be the third Friday of the expiry month.

Roland Bellegarde, Group Executive Vice President and Head of European Execution of NYSE Euronext said that “These new foreign exchange derivatives launched today will allow investors to take advantage of the exchange rate fluctuations in British pounds and US dollars as well as enabling them to hedge currency risks.

“As currency options are an attractive, tradable instrument for market participants we look forward to expanding our foreign exchange franchise into other currency pairs in the future, providing more opportunities for investors to implement their trading strategies” said Mr Bellegarde.

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