flex options.docx

7/29/2019 FLEX options.docx

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LIST OF VARIOUSDEREVATIVE OFFERED

BY NEWYORK STOCK

EXCHANGE

2013

RAM DASS YOGI

ROLL NO :- CUHP11MBA59

1/29/2013

ASSIGNMENT NO :- 1

SUBJECT :- OPTIONS FUTURE AND DEREVATIVES

SUBMITTERD TO:- DR.ASHISH NAG

SCHOOL OF BUSINESS AND

MANAGEMENT STUDIES

CENTRAL UNIVERSITY OF

HIMACHAL PRADESH


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NYSE Liffe

NYSE Liffe offers one of the broadest ranges of products available on any exchange in the

world, providing futures and options contracts across six product lines. This gives our

market Members access to a range of trading opportunities.

Euribor

A Benchmark ContractNYSE Liffes three-month euro-denominated interest rate contractsgive you liquid exposure to Euribor(Euro Inter-bank Offered Rate), providingcomprehensive coverage to short term euro rates.

EoniaNYSE Liff Delivers Short-Term Opportunities Get easy access to short-term benchmarkinterest rates. Exchange-traded Eonia futures contracts let you gain or hedge exposure tothree-month Eonia swap rates and euro overnight interest rates.

STIR OptionsAn Active and Growing MarketNYSE Liffes Short-Term Interest Rate (STIR) portfolio isone of the worlds most liquid and highly traded. Our contracts allow you to hedge against

future interest rate increases with more flexibility.

Packs and BundlesCombo Power in a Single Trade Multiple months, one trade, one price. NYSE Liffes packand bundle strategies let you trade multiple contract months in a single trade. Simple, cost-effective, and no legging risk.


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NYSE Liffe Bond Derivatives

NYSE Liffes bond derivatives portfolio provides cost-effective exposure to short, medium

and long-term UK government bonds (Gilts) and sterling interest rates, as well as long term

Japanese government bonds. On-exchange exposure adds the advantages of secure centralcounterparty trading and NYSE Liffes superior high-speed trading technology.

Interest rates

Short Gilt Futures

Short Gilt futures contracts open up a range of new spread trading and hedging

opportunities to the market.

Medium Gilt Futures

Medium Gilt futures contracts provide a range of new trading opportunities along the

government bond and money market curves

Long Gilt Futures and Options

Long Gilt contracts are based upon a significantly liquid part of the government bond

curve.

Japanese government bond (JGB) futures

benchmark contract covering the most liquid section of the Japanese government bond

curve.

FX

NYSE Liffe offers two cash-settled currency contracts: Euro/Dollar futures (FED) and

options (EDX). These contracts are used either for hedging foreign exchange risk or for

currency speculation and arbitrage. NYSE Liffes currency derivatives have the benefits of

being exchange traded, so they are centrally cleared.

Euro/US Dollar Contracts

Assess the relative value of the U.S. dollar compared to the euro and exploit profit

opportunities stemming from changes in those rates.

NYSE Liffe Wholesale Trading

NYSE Liffes Prof Trade Facility protects traders from counterparty risk. Prof trades are

entered as a single series trade at one price and one counterparty.


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NYSE LIFE US

Interest Rate Futures Overview

NYSE Liffe US Interest Rate Futures provide comprehensive coverage of the US yield curve.Listed on our state-of-the-art LIFFE CONNECT platform, NYSE Liffe US Interest RateFutures deliver market participants a liquid, cost-effective mechanism to hedge theirmarket exposure. Our Eurodollar futures contract launched on March 21, followed byTreasury futures on March 28, 2011. Our products include:

Eurodollar futures 2 year Treasury futures 5 year Treasury futures 10 year Treasury futures U.S. Treasury Bond futures Ultra U.S. Treasury Bond Futures

All products are cleared by New York Portfolio Clearing (NYPC), the joint venture betweenNYSE Euronext and The Depository Trust Clearing Corporation. This innovative US futuresclearing house delivers significant capital and operational efficiencies to marketparticipants from its launch

Precious Metals Futures Overview

Physically Deliverable Gold and Silver FuturesOur fully electronic, transparent market offers liquidity in 100-ounce gold futures, 5,000-ounce silver futures, options on gold and silver futures, and mini-sized 33.2-ounce gold and1,000-ounce silver futures.

The flagship mini gold and mini silver futures of NYSE Liffe US feature the volume andestablished liquidity that active traders require, while offering investors diversificationopportunities and investment flexibility. These contracts are currently cleared through The

Options Clearing Corporation (OCC).
http://globalderivatives.nyx.com/sites/globalderivatives.nyx.com/files/12891_metals_playbill_update_120912.pdfhttp://www.theocc.com/http://www.theocc.com/http://www.theocc.com/http://www.theocc.com/http://globalderivatives.nyx.com/sites/globalderivatives.nyx.com/files/12891_metals_playbill_update_120912.pdf


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Equity Indices Overview

Futures On MSCI Indices

NYSE Liffe US, NYSE Euronexts US futures exchange, is proud to offer a portfolio of futurescontracts based on MSCI Equity Indices. MSCI, the market-leading benchmark indices forthe global investment community, has licensed a suite of US and international equityindices to NYSE Liffe US to create futures contracts that offer broad and efficient coverageof international equity markets.

Launched in September 2009, futures on MSCI Indices provide efficient investment tools tocapture global equity market exposure, with the safety and transparency of a centrallycleared, electronic market.

Futures on MSCI Indices provide market participants with unique trading opportunitiesacross multiple asset classes, and liquidity is created through a range of market makingprograms. The contracts are currently cleared by theOptions Clearing Corporation (OCC),which results in capital efficiencies for NYSE Liffe US customers.

NYSE Arca opitons

1. NYSE Arca Index OptionsIndex options make it possible for investors to "trade" an entire market to seek eitherprofit or protection from price movements in a stock market as a whole or in broadsegments of a particular market.

Equity Options

NYSE Arca Options provides equity options traders superior technology designed to deliverenhanced functionality, transparency and speed. NYSE Arca Options has developed systems

and market structures designed to ensure that customers have the most effective means oftrading on the U.S. options market and achieving best execution in their equity optionstrading activities.

NYSE Arca Options trades more than 250,000 options series based on approximately 2,400equity issues. This includes the trade options on approximately 70 exchange-traded funds(ETFs) and HOLding company Depositary Receipts (HOLDRs).
http://www.optionsclearing.com/http://www.optionsclearing.com/http://www.optionsclearing.com/http://www.optionsclearing.com/


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ETFoptionsExchange-traded funds are index funds or trusts that are traded intraday on an exchange.They allow an investor to buy or sell shares of an entire stock portfolio in a single security.Options on ETFs operate the same as individual equity options. They offer the efficiency ofETFs with the flexibility of options and allow investors to:

Gain exposure to the performance of an index; Hedge and hence protect a portfolio against a decline in assets; Enhance returns on a portfolio Profit from the rise or fall of an ETF by taking advantage of leverage.

ETF options are standardized put and call options on underlying ETFs. Minimum trade sizeis one option contract, with each contract representing 100 shares of the underlying ETF.

FLEX and LEAPs

FLEXoptionsFlexible Exchange (FLEX) options are customized equity or index contracts that allowinvestors to tailor contract terms and enjoy expanded position limits for exchange-listedequity and index options. Like over-the-counter options, FLEX option strategies can betailored according to target trading objectives.

FLEX options combine the benefits of contract customization with the advantages of listingand can provide investors with:

The ability to customize key contract terms, like size, exercise price, exercise style andexpiration date;

Price discovery in competitive, transparent, auction markets; A secondary market to offset positions; Contract guarantee and virtual elimination of counter-party risk.

Equity-FLEX

At NYSE Arca Options, Equity-FLEX options are traded on selected common stocks,American Depositary Receipts (ADRs), exchange-traded funds and HOLDRS.

A minimum of 150 contracts is required to open a new Equity-FLEX series. A minimum of 100 contracts is required to establish opening positions in an existing

Equity-FLEX series.

Index-FLEX


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At NYSE Arca Options, Index-FLEX options are traded on any index upon which optionstrade.

A minimum value of $10 million on the underlying index is required to open a new Index-FLEX series.

A minimum of $1 million is required to establish opening positions in an existing Index-FLEX series.

LEAPSoptionsIn addition to FLEX options, NYSE Arca Options trades Long-term Equity AnticiPationSecurities (LEAPS), long-dated options that have expirations of up to three years from thetime of their listing.

LEAPS provide investors with a longer term view of the market as a whole or on anindividual stock. As with traditional shorter term options, LEAPS are available as calls and

puts.

Equity-LEAPS

Equity-LEAPS allow investors to benefit from the upward, or downward, movement of astock without making an outright purchase. At NYSE Arca Options, Equity-LEAPS aretraded on selected common stocks, ADRs, ETFs and HOLDRS that have expirations of up tothree years.

Series are introduced based on expiration cycles. Initial exercise prices are set atapproximately 25% above and 20% below the underlying stocks price at the time of the

options listing.

Equity-LEAPS blend into their conventional shorter term options within one year ofexpiration.

Index-LEAPSAt NYSE Arca options, Index-LEAPS are traded on broad-based, industry sector andinternational indices. With the exception of their longer term expiration, they work in the

same way as other index options: exercise is permitted only on the last business day beforeexpiration and settlement is with the payment of cash.

Series are introduced based on exercise cycles. Two initial exercise prices are setbracketing the LEAPS index value. New exercise prices are introduced when the value of

the underlying index moves between 10% and 15%.


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Index-LEAPS blend into their conventional shorter term options within one year ofexpiration.

Index Options Overview

Index options allow investors to invest in a specific market industry or in the market as awhole. Indexes are unique and can cover broad segments of underlying stock or canrepresent a small component of the market.

Equity options :

Overview

Growth in the equity options market has been phenomenal in recent years as moreinvestors use options to enhance their equity portfolios. NYSE Euronexts U.S. equityoptions exchanges NYSE Arca Options and NYSE Amex Options account for more than aquarter of total consolidated equity options trading in the U.S.

Benefits of equity options

An equity option is a contract that gives the holder the right, but not the obligation, to buyor sell shares of an underlying security at a predetermined price, on or before a certain

Underlying Name Symbol

AMEX AIRLINE INDEX XAL

Keefe Bruyette Woods Bank Index BKX

MINI NASDAQ 100 INDEX MNX

MORGAN STANLEY CYCLICALINDEX

CYC

NASDAQ 100 OPEN EURO INDEX NDX

Russell 2000 Index (RUT) RUT


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date. These options are physically delivered and if exercised will result in the options beingdelivered or removed from a brokerage account. The holder of the option can choose toexercise the options any time before the exercise date. Expiration for options generallyoccurs on the Saturday following the third Friday of the month.

In the case of an Exchange holiday, the last trading day is the Thursday immediatelypreceding the holiday. Once the exercise date has passed the option contract no longerexists.

With equity options you can: Leverage profit opportunities; when the market rises (or falls) percentage gains (or

losses) exceed the rises (or falls) in the underlying shares Lock in a pre-determined sale price for their shares Protect stock holdings from a decline in market price Generate extra income Benefit from a stock price rise without incurring the cost of buying the stock outright

ETF and ETN options

The NYSE Amex Options trades conventional put and call options on exchange traded funds(ETFs) as well as LEAPS (Long-term Equity AnticiPation Securities) on a number of ETFs.ETFs are index funds or trusts that are traded intraday on an exchange. ETFs enableinvestors to buy or sell shares of an entire stock portfolio in a single security.

ETF options

Exchange-traded funds are index funds or trusts that are traded intraday on an exchange.They allow an investor to buy or sell shares of an entire stock portfolio in a single security.Options on ETFs operate the same as individual equity options. They offer the efficiency ofETFs with the flexibility of options and allow investors to:

Gain exposure to the performance of an index; Hedge and hence protect a portfolio against a decline in assets; Enhance returns on a portfolio; Profit from the rise or fall of an ETF by taking advantage of leverage.

ETF options are standardized put and call options on underlying ETFs. Minimum trade size

is one option contract, with each contract representing 100 shares of the underlying ETF.

FLEX options

FLexible EXchange (FLEX) options combine the benefits of customization with theadvantages of listing and are available on all option products listed on NYSE Amex Options.Both Equity FLEX and Index FLEX options allow investors to customize key contract terms,


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including expiration date, exercise style, and exercise price, and to take advantage ofexpanded position limits.

FLEX Trades are permissible on options not listed on NYSE Amex but require certificationwith the OCC on the day before the FLEX trade is executed. Cut-off time to submit for

certification is 11:00 am on the day before the anticipated trade. Therefore, all requests totrade FLEX options on non-NYSE Amex options must be [email protected] 11:00am on the day before the expected trade date.

Equity-FLEX

Equity FLEX options are designed to extend investor access to customized derivativeproducts. With Equity FLEX options, investors are able to set key contract terms likeexercise prices, exercise styles, and expiration dates, and to trade in size, with no positionor exercise limits.Equity FLEX options are traded on all listed options, including but not limited to, StockOptions, American Depository Receipts, and exchange traded funds.

A minimum of 150 contracts or $1 million notional value (i.e., strike price=$100 thennotional value=$10,000/contract which would require a minimum of 100 contracts) isrequired to open a new Equity Flex Option Series.

A minimum of 100 contracts is required to establish additional opening positions in anexisting Equity Flex Series. For closing transactions the minimum is 25 contracts or theremaining opening interest.

Index-FLEXIndex FLEX options are designed to extend investor access to customized derivativeproducts. With Index FLEX options, investors have the ability to set key contract terms likeexercise prices, exercise styles, and expiration dates.At NYSE Amex Options, Index FLEX options are traded on any index upon which optionscurrently trade. A minimum value of $10 million on the underlying index is required toopen a new Index FLEX option series and a minimum of $1 million is required for an openseries.

LEAPS options

Long-term Equity AnticiPation Securities (LEAPS) are put and call options that haveexpirations of up to three years from the time of their initial listing. LEAPS, which have aunique ticker symbol, meld into their conventional shorter-term options within one year oftheir expirations.
mailto:[email protected]:[email protected]:[email protected]


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At NYSE Amex Options, Equity LEAPS are traded on certain common stocks, AmericanDepositary Receipts, exchange traded funds and HOLDRS, and Index LEAPS are traded onbroad-based, industry sector and international indexes.

Equity-LEAPS

Equity LEAPS are put and call options on selected common stocks, American DepositaryReceipts, exchange traded funds and HOLDRS that have expirations of up to three years.These long-term options give holders the right to purchase (with calls) or sell (with puts)shares of an underlying stock at a specified price on or before a given date up to three yearsin the future. With the exception of their longer-term expiration, Equity LEAPS work in thesame manner as other exchange-listed stock options, and may be exercised on any businessday prior to expiration (American style).Equity LEAPS series are introduced based on expiration cycles. Initial strike (exercise)prices are set at approximately 25 percent above, at and 20 percent below the underlyingstock's price at the time of options' listing. This provides the versatility of in-, at- and out-of-the-money puts and calls.

LEAPS meld into their conventional shorter-term options within one year of expiration.

Index-LEAPS

Index LEAPS are long-term options generally based on a reduced value of an underlyingbroad-based, industry sector or international index and have expirations of up to threeyears. With the exception of their longer-term expiration, Index LEAPS work in the samemanner as all other broad-market index options with exercises only permitted on the lastbusiness day prior to expiration (European style) and settlement with the payment of cash,not the delivery of securities.Index LEAPS series are introduced based upon exercise cycles. Two initial strike (exercise)prices are set bracketing the LEAPS' index value. New strike prices are introduced whenthe value of the index underlying the LEAPS moves 10 to 15 percent.

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