In an early sign that synergies between Nasdaq and the American Stock Exchange are possible, the AMEX is launching options contracts based on a new Nasdaq 100 unit investment trust (UIT).
"We had been talking about developing these kinds of products long before the merger went through," Dan Noonan, a spokesman for the AMEX, said. "I think they are a perfect example of the synergies that can be achieved by the merger."
The options will appeal to investors betting on price swings on the Nasdaq 1OO UIT, an exchange-traded open-ended fund tentatively named Nasdaq Gold, that reflects the performances of the Nasdaq 100 itself.
The Nasdaq 100 index is a benchmark of the top 100 performing Nasdaq stocks, including technology stars such as Intel and Microsoft.
The expected launch for the UIT and the new options contracts is sometime in early 1999. The UIT is subject to approval by the Securities and Exchange Commission.
The AMEX, which is now a subsidiary of the Nasdaq-AMEX Group, has chosen Bala Cynwyd, Pa.-based Susquehana Investment Group as the specialist for the UIT. The options will be handled by a newly-created specialist entity formed by Bear, Stearns & Co. and AMEX specialist Kalb, Voorhis.
Currently, options on the Nasdaq 100 index trade on the Chicago Board Options Exchange, settling in cash. Nasdaq Gold options will be settled with shares of the Nasdaq 100 UIT.
