On Wednesday, NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) announced it will launch options trading on U.S. Treasury Securities at NASDAQ OMX PHLX.
The first day of trading will take place on February 19, 2013.
According to the exchange’s press release, the products will enable investors to hedge interest rate risk with “more precision, using an ‘on the run’ convention” and with contracts on specific, underlying U.S. Treasury 10-year notes and 30-year bonds.?
Eric Noll, Executive Vice President of Transaction Services U.S. and U.K. at NASDAQ OMX, said of the products, “Ten-year notes and thirty-year bonds, are the most heavily traded securities within the fixed income market, and listing options on U.S. Treasuries on our exchange will bring direct market access to global investors. It is mission critical for NASDAQ OMX to offer our member firms opportunities within new asset classes and new structures that improve market quality. This partnership will provide investors with an additional level of transparency, deeper liquidity and improved execution efficiency to this new asset class.”
NASDAQ OMX has partnered with BNY Mellon on developing these products, which will target fixed income portfolio market participants and managers. The two plan to create additional products for this audience.?
Scott Posner, Executive Vice President and business executive for BNY Mellon’s Strategic Growth Initiatives group said, “We have a uniquely broad and deep range of support services for investors in the Treasury Securities space. Collaborating with NASDAQ OMX was the perfect way for us to leverage our experience and expertise, applying to this important asset class our focus on developing innovative solutions that contribute to our clients’ success. By leveraging the strengths of our two organizations, we can bring the benefits of exchange trading ? increased precision in hedging, central clearing, improved transparency and many others, to markets that have previously traded over the counter.”