OREANDA-NEWS. On September 05, 2008 AB DnB NORD Bankas, the leader of the country’s structured investment products market, launched stock options trade. Initially the bank shall offer stock options of eight most liquid stocks quoted on Vilnius and Tallinn Stock Exchanges, reported the press-centre of AB DnB NORD Bankas.

AB DnB NORD Bankas shall write both call and put stock options. Call options shall allow, but will not oblige the customers of AB DnB NORD Bankas to buy the agreed number of shares in the future at a pre-defined price. Put options shall make it possible sell the agreed number of stocks in the future at a price set in the agreement.

According to Mindaugas Tutlys, Head of the Capital Markets of AB DnB NORD Bankas, by starting trade in this financial instrument often used across global markets, the bank expects it to add liquidity to the quoted stocks and provide more opportunities to investors.

 “Until now with equities declining, the trade on stock exchange would often calm down since there were limited possibilities to make profit out of the falling stock value. Having evaluated this fact, we decided to offer a financial instrument that would allow some investors to hedge from the volatility of stock prices and to other investors – earn profit ”, Mindaugas Tutlys, the Head of the Capital Markets of AB DnB NORD Bankas, said.

During bull markets, stock options may be used as a financial leverage to increase return on investment, buying stock options rather than the underlying shares.

When buying an option the investor will pay a pre-defined premium which makes his risk cost in case the market moves in unfavourable direction. Since the bigger return is often linked to higher risk, AB DnB NORD Bankas shall offer this financial instrument to investors well familiar with markets.

AB DnB NORD Bankas shall quote indicative option premiums on the bank‘s website. The Bank shall offer stock options of the following companies: TEO.LT AB, Apranga, Siauliu Bankas and Ukio Bankas which are listed on the Official list of the Vilnius Stock Exchange. The bank’s list of stock options will also include the securities of Eesti Telekom, Arcovara, Olympic Entertainment Group and Tallink traded on the Tallinn’ bourse.

AB DnB NORD Bankas is a universal commercial Bank which provides banking services to individual and corporate customers. The banking group of AB DnB NORD runs three subsidiaries: UAB DnB NORD Investiciju Valdymas, UAB DnB NORD Lizingas and UAB DnB NORD Bustas.

AB DnB NORD Bankas is part of DnB NORD banking group registered in Denmark, which was established by the Norway’s largest bank DnB NOR ASA and North Germany’s largest bank Norddeutsche Landesbank Girozentrale (NORD/LB).