U.S. options exchanges expand listings of weekly contracts

Thu Nov 15, 2012 6:01pm EST

* Expansion of weeklies due to growing customer demand-NYSE

* Weeklies account for as much as 25 pct of daily option volume

By Doris Frankel

CHICAGO, Nov 15 (Reuters) - U.S. options exchanges on Thursday expanded the listing of weekly contracts from one expiration week to five straight weeks for a group of the most-actively traded options on stocks and exchange-traded funds.

Investor demand for the popular short-term options, known as weeklies, has grown dramatically over the past few years with their U.S. option volume accounting for as much as 25 percent of daily activity, according to TABB Group.

Exchange operator CBOE Holdings Inc said starting on Thursday, 10 options classes are available in an expanded program of weekly options expiring each Friday on the C2 options venue and Chicago Board Options Exchange.

The new expirations are: Nov. 23, Nov. 30, Dec. 7 and Dec. 14. The following Friday, Dec. 21, is the last day of trading for the standard monthly December options.

The stocks and ETFs include Apple Inc, Bank of America Corp, BP Plc, Citigroup Inc, iShares MSCI Emerging Markets Fund, SPDR Gold Trust, the iShares Russell 2000 Index Fund Powershares QQQ Trust fund, SPDR S&P 500 Trust fund and the Financial Select Sector SPDR fund.

NYSE Euronext's options venues, NYSE Amex and NYSE Arca, said earlier this week they were the first exchanges to get U.S. regulatory approval to expand their short term options program to five consecutive weeks. In a statement, head of NYSE Euronext U.S. options exchanges Steve Cruthfield said the expansion was in response to growing customer demand.

The two venues on Thursday started listing a group of weekly options that also expire on Nov. 23, Nov. 30, Dec. 7 and Dec. 14. In the new expirations, five products, including Apple and Bank of America, as well as the Financial ETF XLF, are offered on NYSE Arca, and five ETFs, such as the popular SPY and QQQ funds, are available on NYSE Amex Options.

"The enhanced listings of the weeklies provide investors with the ability to refine their option strategies, including both directional exposure and their hedging activities," said Andy Nybo, head of derivatives research at TABB Group, based in New York. "Weekly volumes can currently account for as much as 25 percent of total daily volume in the U.S. listed options markets."

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