NYSE Extends FX Futures Range with GBP F&O’s in its Amsterdam Division

The world's second largest futures exchange has increased the number of currency futures contracts in its Dutch arm, NYSE Euronext

downloadNYSE Euronext, the global financial trading venue, extends its suite of products in listed currency derivatives, with the introduction of GBP EUR and GBP USD futures and options.

The exchange strengthened its current list of six pairs traded in New York and a single contract offered in Europe. The new contract has a consideration of 10,000 units and thus, is useful for both retail and professional traders as there is no physical delivery of the contract.

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Roland Bellegarde, Group Executive Vice President, and Head of European Execution of NYSE Euronext, commented about the new contracts, saying, “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.”

Contract specifications, according to the exchange are:

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  • The underlying value of the GBP/Euro options (trading symbol: PEX) is GBP 10,000, and exercise prices and premiums are in Euros.
  • 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. The underlying value of the GBP/USD futures (trading symbol: FPD) is GBP 10,000, and prices are quoted in US Dollars.

The arrival of the sterling contract comes on the back of a busy summer in the markets, facing uncertainty over the Fed’s decision to keep pumping money into the stabilising economy. In the UK, the appointment of the new BoE Chairman, Carney, has lifted sentiment as he tackles inflationary pressure. UK housing data came on top in August, with an upbeat mood among house purchasers, the pound has strengthened 3% in August, coming off the psychological 1.56 level.

Europe is expected to dominate the currency futures market, with Chicago based CME, establishing its London presence, and Eurex’s recent claim to enter the mighty world of FX. NYSE has a long way to go before it can compete with arch rival CME, that averages plus $100 billion a day in currency futures volumes, and offers a range of  major, minor and exotic currency pairs. The CME was the first major exchange outside India to launch rupee futures. (DGCX was the first offshore exchange to launch the contract)

IntercontinentalExchange (ICE) has been doing the M&A rounds with its latest bid to purchase NYSE for $8.2 billion, the news which came after the failed merger with Deutsche Börse (for $7.4 billion in 2012),  due to regulators’ dissatisfaction,  has sent the NYSE share price sky high, the stock jumped 34% on the news. US regulators have given preliminary approval for the ICE NYSE merger.

The stock is trading at $41.99, range bound near its 52 week high of $43.25.

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