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FTSE 100Weekly OptionsPrecise & Focussed
About LSEDM OfferingWeekly options on the FTSE 100 Indexlisted on LSEDM are the first short-datedoptions on a UK based underlying, listed ona UK exchange.They will expand LSEDM products range onUK underlying that already includes: FTSE100 Index Options FTSE100 Index Futures UK Single Stock Options UK Single Stock Futures FTSE Superliquid FuturesAs with all other derivatives products offeredby LSE, weekly options are cleared by LCHClearnet Ltd and will benefit from the marginoffsets against corresponding futures andoptions positions traded on LSEDM.
Key features15 CALENDAR DAY MATURITYTHUFRISATSUNMONTUEWEDTHUFRIWEEK T-1 CONTRACTWEEK T CONTRACTWEEK T 1 CONTRACTFTSE 100 Weekly options available for trading everyday.Listing on Thursday. Expiry on Friday.1STSHORT-DATED OPTIONSon a UK-based underlying,listed on a UK exchangeCLEARED BYLCHTICK SIZE0.5CONTRACTUNDERLYINGFTSE N TIME
Although weekly options can be considered just as options with very short-termmaturities, the fact that they are made available on a weekly basis allow investorsto take advantage of some specific characteristics that differentiate them fromthe standard monthly maturity cycle. The benefits of weekly options are morepronounced when traded along contracts covering the mid and long-termmaturities as they allow investors to take positions with more precision.Low premiumTime decayTradingStrategiesWeekly options have a shorter maturity thanmonthly options and therefore the time valuecomponent of their price is relatively small.This makes them a useful tool to implementshort-term hedging strategies or takeadvantage of specific macro events witha comparably low outlay of premium.Weekly options allow users to hedge theirshort-term risk and take advantage of marketopportunities with precision. Because of theirhigh gamma, the price of the short-datedoption will respond more than the price ofa long-dated option to a change inthe underlying.The time component of the options has onlyup to 15 days to maturity and time valuedecays sharply approaching expiry. Thiscreates the opportunity to take advantage ofspecific option strategies several time in acalendar month adapting one’s views andexpectation in a more precise way.The interplay between short-dated andlonger-dated options may be of interest tousers of calendar spreads. The fast time decayof weekly options can be used to take shortpositions and the premium received usedto offset the cost of taking long positions inlonger maturities or to repair outright positionsthat are not performing according to plan.Expiry cycleDateFirst week of the monthWeek 1contractWeek 2contractMonthlycontract Second week of the monthWeek 4contractThird week of the month Fourth week of the month (M 1) Fifth week of the month(if relevant)UK Weekly Options (M 1) (M 1)Week 5contract
FTSE 100 Index weekly options contract specificationContract UnderlyingThe FTSE 100 Index. The benchmark Index for the United Kingdom.Type of ContractEuropean Style, Cash settled Call and Put Option Contracts.Central CounterpartyLCH.ClearnetTrading Hours08:00 – 17:00 London time for Order Book trading and Block Trading.07:30 – 17:30 London time for manual Trade Reporting.On expiry day, trading finishes at 12:02MultiplierGBP 10 per Index point.CurrencyGBP, British Pound, .Quotation displayOption Premium in Index pointsTick Size and Tick ValueTick Size: 0.5Settlement styleCash Settlement.Option styleEuropean Style.Listing DayEach Thursday of the month, except the first Thursday. Where this is nota normal Trading Day, the preceding Trading Day shall be used.Contract lifetimesOut to 2 weeksExpiration Day and WeekEach Friday of the month, except the third Friday. Where this is not anormal Trading Day, the preceding Trading Day shall be used.End of Day PricePrice used to calculate theoretical value of Option Contract positions inorder to facilitate the margining process at the clearing level. This price iscalculated in accordance with standard Black Scholes options pricing model.Premium SettlementOne Bank Day after the Trade Day.Exercise SettlementPriceContracts will settle against the official value of the FTSE 100 ExpiryIndex, which is calculated by FTSE Russell after 12:02 London time on theExpiration Day, following the uncrossing at the end of the London StockExchange plc midday Intra-day auction. This will then be rounded by LSEDMto the nearest 0.5 index point.Exercise Window18:10 – 18:40 London time on Expiration Day.Exercise SettlementOne Bank Day after Expiration Day for payment of ExerciseSettlement Amount.LSEDM codesW1UKX, W2UKX, W4UKX, W5UKXBloomberg codesWUKXA Index, WUKXB Index, WUKXD Index, WUKXE IndexReuters codesW1UKX, W2UKX, W4UKX, W5UKXUK Weekly OptionsTick Value: GBP 5
London Stock Exchange Derivatives TeamTelephone 44 (0)20 7382 k-weekly-optionsThis document contains text, data, graphics, photographs, illustrations, artwork, names, logos, trade marks, service marks and information(“Information”) connected with London Stock Exchange Group plc (“LSEG”). LSEG attempts to ensure Information is accurate, however Informationis provided “AS IS” and on an “AS AVAILABLE” basis and may not be accurate or up to date. Information in this document may or may nothave been prepared by LSEG but is made available without responsibility on the part of LSEG. LSEG does not guarantee the accuracy, timeliness,completeness, performance or fitness for a particular purpose of the document or any of the Information. No responsibility is acceptedby or on behalf of the Exchange for any errors, omissions or inaccurate Information in this document. May 2016 London Stock Exchange Group plc.www.lseg.com
UK Weekly Options FTSE 100 Index weekly options contract specification Contract Underlying The FTSE 100 Index. The benchmark Index for the United Kingdom. Type of Contract European Style, Cash settled Call and Put Option Contracts. Central Counterparty LCH.Clearnet Trading Hours 08:00 - 17:00 London time for Order Book trading and Block Trading. 07:30 - 17:30 London time for manual Trade .
