Korea Exchange (KRX) said on the 1st that it plans to list a total of four single-stock weekly options based on Samsung Electronics, SK hynix, Hyundai Motor, and LG Energy Solution on the 29th.
Currently, only monthly-expiry options are listed in the domestic options market for 64 stocks including Samsung Electronics and SK hynix. To develop more diverse exchange-traded funds (ETFs) and provide a variety of investment opportunities, products with weekly expirations are being launched.
The exchange said investor demand for dividend-type ETF products such as covered call ETFs has continued, but a lack of products related to weekly options has limited the development of diverse ETFs. In particular, it noted that overseas markets have derivative ETFs that use various strategies based on weekly options products, raising concerns that domestic investors could shift to overseas markets.
Accordingly, weekly options will be listed on four stocks with high market demand: Samsung Electronics, SK hynix, Hyundai Motor, and LG Energy Solution.
Under the listing method, weekly options expiring the following Thursday are listed every Thursday. However, for issues that expire on the second Thursday of each month, they are not listed to avoid overlap with existing monthly options.
The delivery unit is one share, and the maximum trading period is also one week. On the final trading day (Thursday), two issues with two delivery units are traded together. Except for the listing method and trading period, the main trading rules are the same as existing monthly-expiry single-stock options.
The exchange plans to implement this system from the 29th after gathering opinions from market participants and conducting a mock market operation.
An exchange official said, "Financial investment firms can develop a variety of covered call ETFs that meet investor needs based on single-stock weekly options," adding, "We expect to provide new investment opportunities to domestic investors, ease outflows to overseas markets, and contribute to revitalizing the domestic capital market."