As the volatility in equity markets picked up in February, our index options with weekly expiration dates were experiencing a record demand. Monthly trading volume exceeded 1 million contracts in February for the first time since their launch in April 2006. In 2012, a total of 8 million contracts changed hands. In comparison, during the first two months of 2013 trading volume already amounted to 1.8 million contracts.

Eurex Exchange has been offering options with weekly expiration dates on the two major indexes Dow Jones EURO STOXX 50® and DAX®.  As shown in the graph trading activity in this product segment has been increasing continuously since the beginning of 2009, when additional Market Makers entered the segment.

In terms of contract structure, Weekly Options correspond to monthly expiring options in the final trading week prior to the third Friday of a month. With the decreasing time to expiration, the risk of opportunity increases that the option still moves out-of-the-money as a result of index changes. Given this higher, so-called gamma risk, not every Market Maker wishes to become active in the weekly contracts. Thus, even though their contract specifications are in line with those for the standard options, Eurex Weekly Options are treated as a separate product class.