The first option on the recently launched FTSE U.K. commercial property index series is expected to be traded Monday. The index is an advance on others in the market because it references a liquid property fund managed by MSS Capital which dealers can buy shares in and so use to hedge derivatives on the index.
Matthew Hill, head of real estate at MSS, said Eurohypo, Abbey Financial Markets and The Royal Bank of Scotland currently have licenses with FTSE to write derivatives on the indices. He declined, however, to name the option buyer and seller or details of the trade.
Neil Saunders, director in structured investor solutions at RBS in London, said his firm is close to writing a capital guaranteed structured investment product linked to the all-property total-return index, but declined to specify if it will launch Monday. Ed Stacey, head of derivatives at Eurohypo in London, said his firm is still some way from launching a trade, while derivative officials from Abbey did not comment by press time.
