European options exchanges will seespectacular growth over the next five years as more
professional investors discover the options markets, Bernard
Reed, manager of the London options exchange said.
    At an options outlook seminar to mark tomorrow's official
opening of a new Amsterdam options exchange (EOE) building, he
forecast increasing interest from banks and institutional
investors, using options for portfolio insurance.
    "But the dominance by the professionals should not make us
neglect private clients," he noted. "Successful exploitation of
retail business has been one of the keys to success."
    Reed said derived option products in particular will become
a popular instrument for managing equity risks. On the Chicago
Board Options Exchange (CBOE), the cash-settled S&amp;P 100 index
option is the most traded in the world.
    Dutch Stock Index Fund options to be relaunched on May 18
and the upcoming options on London's FTSE 100 index will see a
30 pct yearly turnover growth until 1990, Reed estimated.
    The CBOE and the Chicago Mercantile Exchange have agreed
with Morgan Stanley to trade options and futures on the capital
international EAFE index which will let investors participate
in worldwide market moves.
    Reed said he did not believe in globalising the option
business by introducing international products, because this
would intensify competition among the exchanges, but he did see
a future for global rules and regulations.
 Reuter
