Philadelphia Exchange, ISE to List SPY Options
Jan. 7 (Bloomberg) -- The Philadelphia Stock Exchange, the fourth-biggest U.S stock-options market, and other U.S. options markets will introduce on Jan. 10 contracts tied to exchange- traded funds that track the Standard & Poor's 500 Index.
The Philadelphia exchange obtained a license from the S&P to offer the contracts on the securities, known as ``Spiders,'' a day after a federal judge in New York blocked a competing exchange's plan to list the contracts without a license, said Dan Carrigan, a vice president at the exchange.
The International Securities Exchange, the second-biggest U.S options market, whose plan to introduce the contracts without a license prompted the S&P to begin offering licenses, will also list them on Monday, it said in an e-mailed statement. Other exchanges, including the Chicago Board Options Exchange, the American Stock Exchange and the Pacific Exchange said they will follow suit.
``This is one of the most important new products to be introduced in years and will provide tremendous benefits to retail and institutional investors alike,'' said Matthew Andreson, head of options trading at Chicago-based Citadel Investment Group, which will be the ISE's main market-maker in the contracts.
Options
Options are the right, without any obligation, to buy or sell assets at a set date and price. Exchange-traded funds, called ETFs, are index-based investment products that allow a trader to buy or sell shares of entire portfolios of stock or commodities in a single security.
Options on another exchange-traded fund, Nasdaq-100 tracking shares known by their QQQQ symbol, are among the most-traded options contracts, with almost 500,000 contracts traded yesterday.
Until now, investors who wanted to buy or sell options based on the stock market benchmark had to take their business to the Chicago Board Options Exchange, which has an exclusive license to list S&P 500 index options.
S&P's parent company, McGraw-Hill Cos., sued yesterday to stop ISE from listing the Spiders options and obtained a judge's order that blocked any exchange from listing the products without S&P's permission.
The Justice Department last year opened an antitrust investigation of the Chicago Board Options Exchange and the American Stock Exchange over the absence of Spider options. The Amex lists the exchange-traded fund itself.
To contact the reporter on this story:
Ann Saphir in Chicago at asaphir@bloomberg.net
To contact the editor responsible for this story:
Gavin Serkin at gserkin@bloomberg.net
Last Updated: January 7, 2005 19:45 EST |
