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CME Group Launched Wednesday Weekly FX Options

Traders Magazine Online News, October 17, 2017

John D'Antona Jr.

By popular demand, the Wednesday weekly is now at the CME.

The CME recently announced that it was launching, pending regulator approval, Wednesday Weekly FX options (Wednesday options) amid growth in existing Weekly FX options, which expire on Friday.

The Wednesday options will be available in premium quoted and volatility quoted European style options with a 2 p.m. CDT fix on five major currency pairs: AUD/USD; GBP/USD; CAD/USD; EUR/USD; JPY/USD. Wednesday options are expected to be available for trading and clearing on October 30, 2017.

Market participants trade weekly options to more precisely manage currency risk during the week. Existing FX Weekly options average daily volume reached a new record of 31,990 contracts in September 2017, which is up 76.6 percent compared to the same time period last year, according to the CME.

"Our clients want to further refine their exposure to mid-week announcements from the Federal Reserve, Bank of Canada and Reserve Bank of Australia's meetings before the end of this year," said Paul Houston, Global Head of FX at CME Group. "More broadly, as event-related trading activity continues to grow, they are looking for the additional granularity of these short-dated FX weekly options, as well as the ability to leverage capital efficiencies and spreading opportunities available in our markets."

CME Group has successfully launched Wednesday Weekly options in other asset classes as well. For example, after launching in June 2017, Wednesday Weekly Treasury options have traded more than 1.1 million contracts.

Wednesday options will be listed with and subject to the rules and regulations of the Chicago Mercantile Exchange. 

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