Listing set for June 29
Weekly expirations to complement existing monthly options
Move aims to broaden ETF development
Korea Exchange said Sunday it will list four individual stock weekly options — based on Samsung Electronics, SK Hynix, Hyundai Motor and LG Energy Solution — on June 29.
Currently, the domestic options market only offers monthly-expiry options on individual stocks.
Investor demand for dividend-focused ETF products, including covered-call exchange-traded funds, has been growing, but the lack of weekly options-based products has limited the development of more varied ETF strategies.
Financial authorities decided to allow weekly options in response, selecting four stocks with high market demand.
The products will be listed each Thursday, with the weekly option expiring on the following Thursday. Weekly options expiring on the second Thursday of each month will not be listed, however, to avoid overlap with existing monthly options contracts.
Each contract covers one share, and the maximum trading period is one week. Korea Exchange said it plans to launch the products on June 29 after completing stakeholder consultations and simulated market operations.
"We expect the listing of individual stock weekly options to lay the groundwork for developing a wider range of ETFs, offer domestic investors new investment opportunities, and contribute to the revitalization of the domestic capital market by curbing the outflow of investors to overseas markets," the exchange said.
The introduction of weekly options is part of a broader effort to address the regulatory asymmetry between domestic and overseas markets. Foreign markets already offer a range of derivative ETFs built on weekly options strategies, which has drawn Korean investors abroad. Financial authorities earlier also lifted a longstanding ban on single-stock leveraged ETFs, with the first such products — covering Samsung Electronics and SK Hynix — listed on May 27.
jiyun@heraldcorp.com
