The International Securities Exchange (ISE) is pleased to announce it will introduce enhancements to its ISE FX Options product suite in early 2010. First, ISE will expand its product offering to include options on the Brazilian real (USDBRL). In addition, ISE plans to introduce "penny strikes" for each expiration month, creating a deep in the money call option for all currency pairs. When this new offering is implemented, investors will have more direct exposure to the FX spot price. Both new products are pending regulatory approval.
"We are very excited to expand the breadth of our ISE FX Options suite with new products that offer traders even more flexibility in hedging exposure to global currencies," said Kris Monaco, Director of New Product Development at ISE. "Demand for exchange-traded, centrally-cleared FX products continues to grow. Options on the Brazilian real will provide investors with exposure to one of the fastest growing emerging market currencies. Penny strikes will allow investors to execute tied-to-spot trading strategies without the counterparty credit risks associated with the over-the-counter FX spot market. For the first time, investors will be able to trade such multi-leg FX spread strategies without legging risk."
ISE currently lists FX options on nine currency pairs. The USD-based, or "per US$," currency convention is available for all nine pairs and allows investors to express their views on the strength or weakness of the U.S. dollar relative to global currencies while adopting the trading strategies they currently use for equity and index options. The "in US$" currency convention, which is the inverse of the USD-based convention, is the traditional convention used in the FX spot market and is available on four currency pairs.
As exchange-listed securities, ISE FX Options can be easily accessed through most major brokerage accounts that are approved for trading equity and index options. These products are cash-settled and have European style exercise. For more information, please visit www.ise.com/fx.