AEX Optiebeurs Prepares For Unprecedented July Turnover

AEX-Optiebeurs has been making preparations for the possibility of an unprecedented level of turnover this coming Friday (19 July) caused by the expiry of the July options contract. AEX Optiebeurs is basing its forecasts on the number of contracts which by Monday's close (14 July) had already risen to 850,000 contracts, a large number of which will be closed or rolled over before or during the last trading day for the July series.

The previous record level of business on an expiry day was in January 1997. The number of contracts in the money then was 380,000 and the number of contracts settled on the expiry date was 411,000.

To ensure that the trading and settlement of transactions proceeds in an orderly number in the coming week, AEX-Optiebeurs has already decided to postpone the introduction of a new options series and to reduce the number of new series. If there is a threat that a situation might arise where proper settlement of transactions cannot be effected on time, the AEX-Optiebeurs has other contingency plans. Naturally these other measures will only be taken if judged to be absolutely necessary.

• If during the trading day before Friday's expiry day excessive volume causes the backlog in the daily processing of transactions to become so great as to endanger settlement on time, AEX Optiebeurs can decided to close the day's trading prematurely.
• If trading becomes extremely busy during the coming week, it can also be decided not to allow any extended trading period.
• In principle, all Friday's transactions will be processed on the same day. If this appears not to be possible, the remainder of the transactions will be inputted on Saturday. After all the transactions have been imputed, AEX-Optieclearing will start its clearing run. This may mean moving the latest time at which an option may be exercised, the excise cut-off them, from 1.00pm on Saturday to a later time. In the most extreme case it may prove necessary to use Sunday for this purpose.

It should be emphasised that such measures will only be adopted in the event of excessive daily volumes. The purpose of the measures is to ensure that ultimately all transactions and in particular closing transactions for the July expiry date are properly processed.

For further information contact Thom Hoedemakers, Amsterdam Exchanges AEX Amsterdam: 00 31 20 550 4540

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