Borsa Italiana to launch single-stock futures

Borsa Italiana’s Idem market, the derivatives arm of the Milan-based Italian exchange, is to launch trading of single-stock futures on July 22.

The exchange initially plans to launch futures on the following underlying Italian stocks: energy companies Enel and Eni; telcos Telecom Italia and TIM; and financial institution Unicredito.

This range was chosen to cover a broad range of stocks with substantial underlying liquidity, Borsa Italiana said.

Single-stock futures are standardised futures contracts that oblige the contract buyer or seller to buy or sell a specific amount of the underlying stock at a stated date in the future. The contracts will range in size from 500 to 1,000 lots, depending on the liquidity of the underlying stock.

Cassa di Compensazione e Garanzia, the Italian clearing house that is part of the Borsa Italiana, will handle all settlement.

The contracts - targeted at both institutional and retail investors - will trade via the Borsa Italiana’s new electronic trading platform, which was launched at the end of May.

“If volatility is good we will be looking to release further contracts next year,” said a spokesman for the exchange.