In recent years, a global trend of expanding weekly expirations to more than one day a week has emerged, with new product launches on U.S. stock exchanges. This movement began in 2008 with Euronext in Europe and has been enhanced since then. In 2016, CBOE and Nasdaq launched new products with this feature in the United States, followed by CME Group in 2022. In 2023, the trend reached the Indian Stock Exchange (NSE), the Bombay Stock Exchange (BSE), and Eurex in Europe.

Currently, options contracts on the Bovespa Index (IBOV) expire every Wednesday of the month. The Wednesday closest to the 15th is reserved for monthly options, while the remaining Wednesdays correspond to weekly options.

This project expands the possibility of Ibovespa options expiring on other days of the week. Therefore, market participants can adapt their strategies to the exact timeframe needed, making portfolios more efficient within their desired risk horizon.

The new  options expirations on the Ibovespa Index will be contracts with exclusively cash settlement and expiration on all other days of the week (Mondays, Tuesdays, Thursdays, and Fridays). They will have a standard ticker, but there will be a specific field to specify the expiration day of the week. The trading code structure will follow the rationale below.

AAAABCCCXn, where:

• AAAA: underlying asset ticker (IBOV)
• B: identification of the expiration month and option type (standard structure for options A to X)
• CCC: option series of 1 to 3 characters
• X: identification of the expiration day of the week (A to E or W), as per the table below:

o "A" - Indicates expiration on Monday

o "B" - Indicates that the option expires on Tuesday

o "C" - None, as Wednesday is the standard expiration date for monthly options. Therefore, the code remains "W" as per existing options

o "D" - Indicates expiration on Thursday

o "E" - If the next business day is Friday

o n: Identification of the order of the expiration week from 1 to 5 (standard for weekly options)

For more examples of tickers, see the presentation available in the support materials.

The addition of new expiration dates will expand the options available to investors, allowing for more effective strategy adjustments based on their risk profile and desired time horizon. This includes, for example, the possibility of aligning positions with specific macroeconomic event dates.

Furthermore, the new expiration alternatives tend to reduce the cost associated with Theta - which represents the loss in options’ value over time - which is more evident when expirations are less frequent. With this update, the market is also given greater flexibility to perform portfolio hedging more accurately, promoting an  agile trading environment in line with investor demands.