BYMA introduces a new product: Fixed Income Options Traded in U.S. Dollars

BYMA announces the launch of options on US dollar-denominated government securities, which will be traded and settled in US dollars.

Trading will be carried out in the PPT (Price Time Priority) segment, where BYMA, as Clearing House and Central Counterparty, guarantees settlement on the agreed date and conditions. In this way, BYMA extends its derivatives market, composed so far by trading options on stocks and fixed income in pesos.

Among the advantages of trading options on government securities with settlement BYMA where, in addition to guaranteeing transactions, it provides the following strengths:

• Standardization in the process of conducting transactions and their subsequent processing.
• Anonymity in completed transactions.
• Centralization in risk monitoring.
• Transparency and publicity of prices traded.
• Minimization of different risks.

THE PRODUCT: Main advantages and features

Fixed income security options are a simple and attractive product. They will be traded in the same currency of issue of the underlying asset, eliminating the exchange rate risk. On the other hand, they offer the possibility of hedging portfolio duration risks, covering positions in different points of the Argentine sovereign USD curve, allow a better use of the fixed income securities that agents already have in their portfolio, from the launching of hedged positions, and help to fix a yield, in dollars, in case of adverse movements of the exchange rate.

The idea of BYMA is to start adding species as agents feel they need underlying assets at other points on the sovereign curve.

The underlying assets chosen for a first derivatives launch are:

• ARGENTINE NATION BOND IN DOLLARS 8.75% 2024 (AY24D)
• ARGENTINE NATION BOND IN DOLLARS 7,875% 2027 (A2E7D)
• BOND OF THE ARGENTINE NATION IN DOLLARS 7.625% 2037 (AA37D)

Contract Description

SUBJECT ASSETS: AY24D / A2E7D / AA37D

SERIES NAME: U24 / U27 / U37 (Ex. U37C107JU) the letter "U" will indicate its negotiation in dollars

LOT SIZE: 1.000 VN

PRICE QUOTATION: 100 VN

MINIMUM PRICE VARIATION: USD 0.01

OPTION TYPE: AMERICAN

TRADING PRICE IN USD: (DIRTY) Integers and in fraction of 16ths

(Ex: 10707 = 107.4375, where 7/16=0.4375)

CURRENT PRICE ADJUSTMENT FOR COUPON PAYMENT: Same day coupon cutoff of the underlying asset

LATES: Next two consecutive monthly maturities and next even month.

MATURING DATE: Third trading day prior to the end of the month

SETTLEMENT PERIODS: Premiums: 24 hours (T+1), Exercises: 72 hours (T+3)

CALCULAR MARKETS: As per Circular No. 3562

MARKET DUES: 0.06% of the effective value of the transaction.

See product presentation:

.