KRX will push options, futures to revive market

The Korea Exchange (KRX), Korea’s bourse operator, said yesterday it will add vitality to the country’s stagnant equity derivatives market by boosting the trading volume of options and futures.

The move comes as the country’s equity derivatives market has been in the doldrums as investors’ appetite for risky assets shrunk following the protracted economic slowdown, market watchers said.

Only two individual stock option contracts were made in 2011, a huge drop from the 11,602 contracts made a year earlier, industry data showed. No stock option contracts were made through October of this year, according to the KRX.

The average daily trading of equity futures reached 232.2 billion won ($208.3 million), accounting for a mere 0.7 percent of the country’s index-linked futures trading, the data showed.

Stock derivatives are financial instruments linked to performances of individual listed firms, whereas index derivatives move in proportion to the country’s key stock index.

The KRX said it will reduce the number of listed firms available for options contracts, with more blue chips on the list of underlying assets.

Currently, 33 firms, including Samsung Electronics and Hyundai Motor, serve as underlying stocks for individual stock option contracts.

The KRX said it will discuss details of stimulus measures on the country’s derivatives market with related institutions.

Yonhap