Phlx To Launch Options In Corporates, Munis P

The Philadelphia Stock Exchange will launch more fixed income products next quarter after last week's first-ever launch of options on iShares Lehman U.S. Treasury ETFs.

"We definitely have plans to bring in additional fixed income products in corporates and municipals, perhaps by the third quarter," said Daniel Carrigan, v.p. of new products. Phlx chose iShares because they are the only benchmark exchange traded funds on Treasuries that replicate the different terms of Treasuries.

Lehman iShares 1-3 Year Treasury Bond Fund, 7-10 year Treasury Bond Fund and 20+ Year Treasury Bond fund are allocated to Susquehanna Investment Group and Lehman iShares Aggregate Bond Fund and TIPS Bond Fund are allocated to LaBranche Structured Products to maintain a two-sided market. The options will trade over Phlx XL, the exchange's electronic trading platform.

"Interest rate volatility has been a constant headline since the Federal Reserve began raising interest rates. With the bond market having experienced a sharp sell-off since mid-February, Phlx wanted to bring interest rate trading tools to [its customers]," Carrigan explained.

The Chicago Board Options Exchange has traded options on all the iShares except the TIPS for several years. The American Stock Exchange trades TIPS and the International Securities Exchange trades the 20+ year.