Montreal:
Nasdaq
Canada has announced that the Nasdaq Stock Market (www.nasdaq.com)
has signed a license agreement with Citibank AG Frankfurt
to allow Citibank to list and trade sponsored options
on the Nasdaq-100 Index Tracking Stock (AMEX: QQQ) on
the Montreal Stock Exchange.
 A
sponsored option is a new derivative product in Canada
to allow investors the privilege of buying or selling
the underlying asset at a given price (exercise price)
up to a given expiration date.
There are two key differences between the sponsored options and
exchange traded options. One is that the contract terms of the
sponsored option are set by the sponsor and are not standardised.
This is in contrast to the traditional exchange-traded option on
the Bourse of Montreal, for which the contract terms are
standardised and set by the Bourse of Montreal. The other is that
an individual investor cannot write sponsored options, as the
sponsor is the sole writer of the options.
"We are delighted to
have Citibank-sponsored options on QQQ available to Canadian
investors through this cooperation with the Montreal Stock
Exchange and Citibank," says Nasdaq Canada president Helen
Kearns. "We know that Canadians are looking for more ways to
invest in Nasdaq-branded products and the Citibank sponsored
options provides an excellent new opportunity to do that."
Says Nasdaq Financial
Products Services CEO John Jacobs: "Now that sponsored
options in QQQ are able to trade in Canada, we look for investor
awareness of the Nasdaq-100 Index and QQQ to increase. With the
Nasdaq-100 Index already linked to the return of several
Canadian notes and used as a benchmark for a number of Canadian
mutual funds, the sponsored options should add to the visibility
of the Nasdaq-100 in Canada."
Citibank-sponsored options on the Nasdaq-100 Index Tracking Stock
will allow Canadian investors to gain a long-term exposure to QQQ
at a fraction of the cost, underlying the asset. The trading began
on 28 January 2002.
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