OTC Flexible Options

Eurex has implemented a series of functional enhancements on OTC Flexible Options that facilitate back office processing. OTC trading in options on more than 250 individual equities, on equity indexes, Exchange Traded Funds (ETFs) and fixed income futures has thus become even more flexible.

The OTC Flexible Options facility is available for

• Options on Fixed Income Futures
• Equity options / Low Exercise Price Options (LEPOs)
• Equity index options
• EXTF options

The handling of OTC Flexible Options trading in the Eurex® system is visualized in the film "Introduction to Trading OTC Flexible Options on the Eurex @X-Ceed Front-End".

Option trades can be tailored by individually defining parameters as:

• Exercise Price - The selected exercise price can be defined above the highest exercise price of the corresponding regular options series or may be the lowest exercise price of an option (e.g. LEPOs) which is available in the Eurex® system or an intermediate price. Maximum exercise prices for Flexible Options are limited to 2.5 times the highest available standard exercise price in the respective product.
  
  
• Expiration Date - The expiration date can be any exchange day (with some special Eurex defined exceptions) starting from the next business day until the longest currently active standard expiration date of the affected standard product.
  
  
• Exercise Style - American or European exercise can be selected.
  
  
• Settlement Type - The settlement type of OTC Flexible Options is arbitrary. For OTC Flexible Options trades at time of conclusion members can choose to settle their trades either with cash or with the physical settlement type available for the product.
  
  

The minimum trading size for Flexible Options is identical to the OTC Block Trade size of regular Eurex options. Flexible Options and regular Eurex options are combined in one margin class and are taken into account for cross margining.

Details about how to use the OTC Flexible Options facility, further product information and an overview of all Flexible Options and Futures available for trading can be found in these attached documents:

Name	Date	File Size	File
Introduction to Trading OTC Flexible Options on the Eurex @X-Ceed Front-End	Apr 2008
Eurex OTC Flexible Contracts February 2008	Feb 2008	780 kB
Guidelines for Trading Flexible Options and Futures	Jan 2008	444 kB
Xpand 10/2007	Oct 2007	875 kB
Circular 232/07	Nov 2007	1.200 kB
Eurex Product List and Product Grouping	Nov 2007	387 kB