LONDON OPTIONS MARKET SEES CONTINUED HIGH GROWTH
The London Stock Exchange's traded
options market plans volume growth of at least 80 pct a year,
and will more than double the range of options available by the
end of 1988, options committee chairman Geoffrey Chamberlain
said.
    He told a news conference that more options contracts were
traded in 1986 than in the previous seven years of the market's
existence.
    Chamberlain said the daily average volume of contracts
traded in February this year almost tripled to 53,056 from
19,034 in the same month last year, and further rapid growth
was expected.
    "We're aiming for 100 stock option classes by the end of
1988," said Chamberlain. These would correspond to the eligible
constituents of the FT-SE 100 share index.
    Chamberlain added that two new equity options were to be
introduced this month. Options will be available in Sears Plc
<SEHL.L> from March 4, and in Plessey Co. Plc <PLYL.L> from
March 19.
    The London Stock Exchange is the largest outside the United
States for options trading. Forty-five equity options, two
currency options, two government bond (gilt) options and an
option on the FTSE-100 index are available at present.
    Chamberlain said the Stock Exchange aimed to consolidate
the London options market's leading position in Europe,
especially important with French and Swiss equity options
trading planned to start this year.
    "I'd go so far as to say the plans for growth are
conservative," one leading options analyst said, predicting
continuing volume growth of around 20 pct a month for at least
the next year.
    He said much of the recent growth in options had come from
inter-market-maker trading aimed at hedging book positions. But
now the retail options market was beginning to take off.
    The market trades from a corner of the now largely deserted
floor of the London Stock Exchange. The floor has been left
almost empty in the wake of the recent regulatory changes in
the equity and gilts (government bond) markets, which have
encouraged a move to electronic off-floor trading.
    Yesterday, the Stock Exchange decided to close the floor to
equities trading altogether, and said it expected to make a
final decision on the floor's future by the end of 1987.
    The floor space could be used for a purpose-built options
market, but Chamberlain said that it was unlikely that the
options market would need more than half of the available
space.
 REUTER
