CBOE Launches Credit Default Options on Five Companies
The Chicago Board Options Exchange (CBOE) announced that it will launch Credit Default Options on five individual companies: General Motors Corporation (GM), Ford Motor Company (F), Lear Corporation (LEA), Hovnanian Enterprises, Inc. (HOV) and Standard Pacific Corp. (SPF) on Tuesday, June 19, 2007. CBOE received regulatory approval yesterday from the Securities and Exchange Commission (SEC) to list and trade Credit Default Options such as these, and approval for CBOE's Credit Default Baskets is expected soon. CBOE's Credit Default Options offer the opportunity to hedge or speculate on the risk of credit events such as bankruptcy and failure to pay.
"We are very pleased to receive SEC approval for these products which we first proposed last June. Investors can now take advantage of the synergies between options prices, volatility and credit risk, hedging all three on one electronic platform, CBOEdirect," said CBOE Chairman and CEO William J. Brodsky.
"CBOE's credit products will provide investors with the advantages of a standardized, exchange-traded options contract, including triple-A rated clearing, price transparency and reduced trading costs.”
CBOE's Credit Default Options are cash-settled binary call options that pay $100,000 when the Exchange confirms that a credit event, such as default on specified payment obligations, has occurred. If no such credit event occurs, the option expires with no value. Special procedures apply in the event of a succession or redemption.
Nexa Technologies and CBOE Expand Relationship With Development of New HyTS Terminal
Nexa Technologies, Inc., a subsidiary of Penson Worldwide, Inc. (NASDAQ: PNSN), and the Chicago Board Options Exchange (CBOE) announced the release of the Nexa HyTS Terminal, a multifunctional trading solution workstation, that offers users a broker-neutral connectivity solution to the CBOE and all other U.S. options exchanges. The Nexa HyTS Terminal features added functionality, including a streamlined GUI, FIX drop copy capabilities and a complete demo environment for user evaluation prior to implementation.
Clients will experience a clean, user-friendly interface designed by experienced options traders that provides integrated access to
U.S.
options exchanges as well as futures and equities products. The new terminal enhances a trader's ability to manage trading in multiple asset classes through a single front-end.
In addition to complete connectivity to
U.S.
options markets, the Nexa HyTS terminal is delivered with real-time market data, streaming quotes and a full set of order management tools. The new product is not a replacement for the current HyTS technology, but rather an additional option from which members can choose. The new version is available immediately to CBOE members through Nexa affiliate Penson Financial Services, Inc., and can be delivered via the Internet.
Earlier this year, the CBOE and Tick Data, Nexa Technologies' market data division, joined forces to release the industry's first commercially-available, research-ready historical intraday database for the
U.S.
options market. The Tick Options Database is being employed by high-frequency buy-side and sell-side firms to design, test and validate algorithmic options trading models and used for pre- and post-trade analysis and optimization of execution strategies.
Frank Kneipher
FKPRINTS1@YAHOO.COM
