NZX flighty on option trading

New Zealand's flirtation with option trading is a capricious one. The market failed to take off in the 1990s and the idea was canned, but the New Zealand Exchange decided to try again this year.

Last week's eleventh-hour decision to put off the relaunch of option trading created more doubt about the country's relationship with derivatives.

NZX's lack of assertiveness might appear awkward. But it could also be argued that the to and fro reflects the nature of these instruments – speculative, tricky, and risky.

Before stockmarkets and derivatives existed, an 18th-century Frenchman, Joseph Roux, had it figured out. "Literature was formerly an art and finance a trade; today it is the reverse," he said.

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