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    Flexible Equity Derivatives

    Design contracts to fit your investment strategies

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    Trading and Clearing of Flexible Equity Derivatives

    Flexible contracts combine the flexibility of the OTC market with the security and efficiency of the standardized market. Investors can design contracts that fit their investment strategies and goals.

    • Cross-margining: Cross margining with listed positions in the same underlying instrument leads to efficient use of capital. The same risk parameter applies for flexible contracts on underlying instruments with listed standardized options as for the standardized contracts.
    • Efficiency: Central counterparty clearing and automated process mean operational efficiency in clearing, settlement and corporate action handling.
    • Flexibility: Flexible derivatives can be tailored to a certain exercise price, expiration day, exercise style (American or European) or settlement type (physical or cash).
    • Expiration settlement price: VWAP for indexes; closing price for stocks.
    • Market information: Flexible derivatives are available for trading at Nasdaq Derivatives Markets. The trade-level market information is published.

    Flexible contracts combine the flexibility of the OTC market with the security and efficiency of the standardized market. Investors can design contracts that fit their investment strategies and goals.

    • Cross-margining: Cross margining with listed positions in the same underlying instrument leads to efficient use of capital. The same risk parameter applies for flexible contracts on underlying instruments with listed standardized options as for the standardized contracts.
    • Efficiency: Central counterparty clearing and automated process mean operational efficiency in clearing, settlement and corporate action handling.
    • Flexibility: Flexible derivatives can be tailored to a certain exercise price, expiration day, exercise style (American or European) or settlement type (physical or cash).
    • Expiration settlement price: VWAP for indexes; closing price for stocks.
    • Market information: Flexible derivatives are available for trading at Nasdaq Derivatives Markets. The trade-level market information is published.
    clearing brokers for nasdaq risk platform
    Feasibility_Marketplace_advisory_services_Nasdaq

    Underlying Security

    Forwards, futures and options on:

    • Single stocks where Nasdaq operates a market for listed derivatives for Swedish, Finnish, Danish and Norwegian stocks.
    • Other single stock names occasionally approved by Nasdaq.
    • Selected Nasdaq indexes such as OMXS30, OMXS30 ESG, OMXSB, OMXO20 and OMXC25.
    • Custom-made indexes and stock baskets as agreed on a case-by-case basis.


    Other types of instruments and contract bases may also be considered as Flexible Derivatives Contracts upon request. However, only customized financial instruments with an underlying security that has been subject to risk analysis (and formally confirmed and approved by Nasdaq) are eligible for clearing. Consult the list in the Resource Center.

    List of eligible instruments including block sizes and deferral thresholds
     

    Forwards, futures and options on:

    • Single stocks where Nasdaq operates a market for listed derivatives for Swedish, Finnish, Danish and Norwegian stocks.
    • Other single stock names occasionally approved by Nasdaq.
    • Selected Nasdaq indexes such as OMXS30, OMXS30 ESG, OMXSB, OMXO20 and OMXC25.
    • Custom-made indexes and stock baskets as agreed on a case-by-case basis.


    Other types of instruments and contract bases may also be considered as Flexible Derivatives Contracts upon request. However, only customized financial instruments with an underlying security that has been subject to risk analysis (and formally confirmed and approved by Nasdaq) are eligible for clearing. Consult the list in the Resource Center.

    List of eligible instruments including block sizes and deferral thresholds
     

    Flexible Derivative Parameters

    Maturity

    Time to expiry (the expiry date must be a bank day for that particular market)

    Exercise Style

    European (single stocks and indexes) or American (single stocks) options, futures and forwards. For other contract types, contact Nasdaq

    Settlement Type

    Cash settlement or delivery at expiration

    Strike Price

    Any strike price, maximum 30% out of the money.

    Clearing of Flexible Derivatives

    The European Market Infrastructure Regulation (EMIR) requires clearing part of the OTC Derivatives at a CCP. The supervisory authorities determine which derivatives fall under the mandatory clearing.

    Based on customer demand, the spectrum of eligible instruments for clearing at Nasdaq may be widened based on the EU regulation and decisions taken by the supervisory authorities.

    The contracts are governed by the same trading and clearing rulebook as standardized contracts. The same Fee List for the Listed and Flexible Contracts.

    The European Market Infrastructure Regulation (EMIR) requires clearing part of the OTC Derivatives at a CCP. The supervisory authorities determine which derivatives fall under the mandatory clearing.

    Based on customer demand, the spectrum of eligible instruments for clearing at Nasdaq may be widened based on the EU regulation and decisions taken by the supervisory authorities.

    The contracts are governed by the same trading and clearing rulebook as standardized contracts. The same Fee List for the Listed and Flexible Contracts.

    Nasdaq Exchange Trading Services
    Nasdaq Trading Exchange Services beyond trading

    Benefits of Flexible Derivatives

    Flexible contracts provide opportunities to trade derivatives even when the portfolio requires features that the listed market cannot offer. Investors will still have the advantages of clearing, such as corporate action surveillance, recalculation handling, cross-margining between flexible and standardized contracts, as well as post-trade information in the Nasdaq clearing system.

    Flexible contracts provide opportunities to trade derivatives even when the portfolio requires features that the listed market cannot offer. Investors will still have the advantages of clearing, such as corporate action surveillance, recalculation handling, cross-margining between flexible and standardized contracts, as well as post-trade information in the Nasdaq clearing system.

    Exchange Traded Standardized and Flexible/OTC Non-Cleared
      Exchange Standardized Traded Flexible OTC
    Automated process Yes Yes No
    Governed by Nasdaq trading rules Yes Yes No
    Governed by Nasdaq Clearing rules Yes Yes No
    Order book liquidity Yes (Yes) No
    Central counterparty Yes Yes No
    Flexible terms No Yes Yes
    Published Yes Yes No

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    Contact Us

    Contact our European Equity Derivatives Sales team

    Resource Center

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