Eurex lists options on Source ETFs

The derivatives exchange Eurex will list seven options contracts on June 1, based on a range of Source ETFs.

One of the contracts will track the Stoxx Europe Mid 200 Source ETF, while the other six options will be based on the Stoxx Europe 600 Optimised Supersectors Source ETFs.

These funds cover a range of sectors comprising banks, basic resources, industrials, oil and gas, telecommunications and utilities.

The latest ETF options will complement the other recently launched contracts based on three benchmark index ETFs.

Eurex executive board member Peter Reitz says: "Sector and size indices have become more important in the asset allocation of institutional investors, which is reflected in the strong asset growth in respective ETFs."

Source CEO Ted Hood says options markets need highly liquid reference assets, which has historically posed a challenge to trading options on European ETFs.

The latest ETF options will trade in euros, will be physically settled and will have maturities of up to 24 months. The contract size will be 100 units and Nomura will act as market maker, to support liquidity in the order book.

The Source ETFs underlying the options contracts are listed on the XTF segment of the Deutsche Boerse. The exchange says this segment has 669 listed funds and has a market share of around 38% of European ETF turnover.