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NYSE Liffe to launch weekly options on single stocks

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NYSE Liffe will introduce weekly options on three of the most liquid shares traded on the Amsterdam market on 16 July: ING Group, Royal Dutch Shell and ArcelorMittal.

These contracts, which will provide investors with more opportunities to trade the major Amsterdam blue chip stocks, are the first ever weekly options on individual shares in Europe.
 
The key attraction of weekly options is that they cost less to trade than longer-dated alternatives. Generally the premium payable on short-lived weekly options is lower because its time value element is smaller.

For the same reason they also offer greater leverage: according to NYSE Liffe even a small price movement in the individual shares can generate an attractive return.
 
The launch of weekly options on individual stocks follows the introduction of AEX-index daily and weekly options, launched respectively in March 2008 and May 2006. Since the start in 2006 more than 14 million AEX weekly options contracts have been traded, with an average monthly volume of 284,000 lots. The average monthly volume of the AEX daily options currently is 368,000 lots.
 
Alan van Griethuysen, business head Benelux and Asia at NYSE Liffe, says: “Short term options hit the ground running when we introduced them on the AEX-index as they cater to the investment needs of a broad range of both retail and professional investors. By extending the weekly options into single stock names we are responding to the needs of investors and, in particular, to Dutch retail investors, knowledgeable in options trading. Weekly options on high profile single stocks is the latest product innovation from NYSE Liffe and we believe it will create the same vibrant order screens we’ve seen from day one in the AEX Weekly options.”

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