Citibank has structured what is believed to be the first option on Korean Treasury bill futures. An official at the firm in Seoul said that a local corporate purchased a USD16 million over-the-counter option with a one-month maturity on the one-month future for the three-year Korean Treasury bond. "This is the first I've heard of," said a trader at a rival firm. He continued that the Korea Futures Exchange (KOFEX) is looking to list KTB options next year, and possibly options on KTB futures.
"People are interested in this for the same reason as standard options: minimal investment and from a risk management point of view you know the downside," noted the official at Citibank in Singapore.
