Euronext.liffe beefs up French options

Euronext.liffe, the derivatives arm of European exchange group Euronext, has increased the size of its CAC40 index options by a factor of ten.

Each index point in the new contract will be worth €10, as opposed to the previous contract that was worth €1. This means traders will now only have to trade one contract to achieve the same exposure they previously gained by trading ten.

The exchange also said it will roll-out a similar change across its French equity option contracts. The new options will be American-style, with each contract increasing in size from 10 to 100 shares. By mid-December, 2005, there will be no contracts remaining of the old format.

The change comes partly in response to customer demand, but also to the exchange’s ongoing programme of harmonising its equity derivatives products across its various markets.

At the same time, the exchange has cut its trading fees by 8%. Since November of last year, it says fees have already dropped, on average, by 25%.

“This is one of the final steps in our programme to harmonise and simplify our equity products wherever we can. Over the past couple of years we have migrated trading onto a single platform, introduced a single corporate events policy, moved all contracts to a standardised specification and reduced trading fees for individual equity options by an average of 25%," said Fraser Cowie, Executive Director of Marketing at Euronext.liffe. "All of this means that trading equity derivatives across much of Europe is now far simpler and cheaper than before," he added.