Nasdaq Clearing .

Flexible Equity Derivatives

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. Thus, the 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). For OMXS30 Options it is possible to choose Volume-weighted average price (VWAP) or last paid price as the Expiration Settlement Price.
  • Market Information - Flexible derivatives are available for trading at Nasdaq Derivatives Markets. The trade-level market information will be published.

Fact Sheet

  • Underlying security
    - Forwards, Futures and Options on single stocks where Nasdaq operates a market for listed derivatives: Swedish, Finnish, Danish and Norwegian stocks.
    - Forwards, Futures and Options on other single stock names occasionally approved by Nasdaq.
    - Futures and Options on selected Nasdaq indexes, such as OMXS30 (flexible Options only), OMXO20 and OMXC25
    - Forwards and options on 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. List of eligible instruments including block sizes and deferral thresholds.
  • Maturity
    - Time to expiry (the expiry date must to be a bank day for that particular market). 
  • Strike price 
  • Contract type
    - European or American options, futures and forwards. For other contract types the member is asked to contact Nasdaq. 
  • Settlement
    - Cash or delivery
    - For OMXS30 Index Options it is possible to select either the Volume Weighted Average Price or the Daily Closing Price as the settlement price.

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.

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 margins between flexible and standardized contracts, as well as post-trade information in the Nasdaq clearing system.

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

Exchange Traded Standardized and Flexible/OTC non-cleared

Exchange Standardized   
Traded FlexibleOTC
Automated processYESYESNo
Governed by Nasdaq trading rulesYESYESNo
Governed by Nasdaq Clearing rules
Order book liquidityYES(YES)No
Central counterpartyYES
Flexible termsNoYESYES
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