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Colombian stock exchange launches options market

Colombian stock exchange Bolsa de Valores de Colombia SA, or BVC, has launched its options market, with two transactions carried out for three contracts equivalent to $150,000.

Bancolombia SA and Credicorp Capital were the first operators to release options on the representative exchange rate, or TRM, in the BVC's derivatives market, the bourse said in a filing.

The options market is arriving at an ideal time for the market, the BVC said, as "the volatility of the exchange rate is high and it becomes a new tool for effective coverage of portfolios in foreign currency."

Call options expiring in March were operated, both with a strike of 2,880 Colombian pesos. Option premiums were negotiated at 36.40 pesos and 31.50 pesos, implying volatilities between 14.50% and 11.20%, in the exchange rate, BVC said.

As of Feb. 21, US$1 was equivalent to 2,878.60 Colombian pesos.