SEC approvals pave way for Chicago Board Options Exchange to trade options on ETNs

By Jennifer Chiou

New York, March 16 - The Chicago Board Options Exchange announced that the Securities and Exchange Commission approved a proposed rule change from the CBOE that will allow the listing and trading of options on exchange-traded notes.

The SEC approval is for rule changes to establish strike price intervals and trading hours for options on exchange-traded notes, also known as index-linked securities.

Before the trading of the ETNs, CBOE said it had proposed the rule change for the new investment products.

No comments were received on the proposed rule.

According to an announcement by the SEC, the proposal will extend the trading conventions for options on exchange-traded funds to options on index-linked securities.

Specifically, under the proposed rule change, strike price intervals of $1 will be permitted where the strike price is less than $200, CBOE said.

When the strike price is greater than $200, $5 increments will be permitted, the release added.

In support of its proposal, CBOE stated that it believes the marketplace and investors will be expecting ETN options to trade in a similar manner to options on ETFs.

CBOT Holdings operates the Chicago Board of Trade, a Chicago derivatives trading exchange. Chicago Mercantile Exchange is the first publicly traded U.S. financial exchange.

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