Just recently, CME Group Inc. mentioned that it is going to increase its available amount of electronically traded forex options items, establishing the exchange's most recent effort to stimulate more options trading.
Starting on September 10th, CME mentioned that it will display forex options every week on future values of 6 different currencies connected to the United States dollar, and will have the contracts ready for trading twenty-four hours per day on the CME's Globex computer platform.
The choices, which at this moment are listed on a quarter-by-quarter basis, but are ready for use in the trading pits with weekly expirations, will have U.S.-style expiration, which translates to where traders can exercise the choices before they expire.
"Moving from quarterly to weekly, that does really expand the utility of this product significantly," mentioned forex strategist Mike Moran, who represents Standard Chartered Bank. "I can only imagine from a broad perspective that this is really going to broaden out the use of these products for investors."
CME, which happens to be the biggest derivatives exchange in the world, has called the forex market one of its most important areas for growth, and the market will continue to see progress in the exchange of forex futures and options. These items reached an average of 641,000 contracts per day in the month of August, which is an increase of sixty seven percent over the previous year. This represents about four percent of the accumulated exchange volume for the month.
Options on futures allow the trader to have the right, but not the required duty, to purchase or sell a futures contract. The 6 other currencies tied to the United States dollar that will be offered on Globex are the Japanese yen, euro, Swiss franc, British pound, Australian dollar, and the Canadian dollar.
