Reference is made to the amendments made to the Euronext Oslo Børs Rule Book II in connection with the rule on automatic admission of new shares, including clarifications of the rule and guidance, as well as a new information obligation in connection with the issuance of new shares of the same share class as already admitted to trading on the Euronext Oslo Stock Exchange or Euronext Expand. The changes take effect as of today, 4 July 2024. The Euronext Oslo Rule Book II has been updated accordingly and is available here: Euronext Regulated Markets | euronext.com.

The Rule Book II has also been updated to reflect that the Euronext Oslo Børs has adopted the commercial name "Euronext Oslo Børs." Additionally, updates have been made to the wording of the following sections of Euronext Oslo Rule Book II:

• The guidance to section 3.1.3.6 on requirements for the audit committee previously made reference to section 12-1 of the Securities Trading Regulations, regarding the composition of the audit committee. Following a subsequent regulation update, the reference has been updated to § 5-12 in the Securities Trading Regulations.
• Sections 4.2.4 (1) no. 2 and 6.2.2 (2) no. 2 on the information obligation in the event of corporate actions previously contained a rule on the obligation to inform the market upon the issuance of new loans. The obligation implemented a corresponding provision in section 5-8 (4) of the Securities Trading Act. As section 5-8 (4) of the Securities Trading Act has been repealed, sections 4.2.4 (1) no. 2 and 6.2.2 (2) no. 2, as well as related references, have been updated accordingly.
• In the guidance to section 4.6.2 (5) on general meetings, the reference to section 5-8 (6) of the Securities Trading Act has been removed in accordance with a subsequent legislative amendment.
• In the guidance to section 4.8.1 on general rules for foreign issuers and Norwegian issuers with a secondary listing, the reference to the Prospectus Directive under 4.8.1(2) has been removed. Furthermore, the reference to the section 5-4 (5) of the Securities Trading Act has been updated to refer to section 5-4 (8), in line with a subsequent legislative amendment.
• In sections 4.8.2.1.2 (2) and 4.8.3.2.2 (2) for foreign issuers with Norway as their home state, as well as section 6.4.2.2 on the exemption from the obligation to prepare a statement of corporate governance, the reference to the consistency check according to the Auditors Act has been updated from section 5-1 to section 9-4, in accordance with a subsequent legislative amendment.
• In sections 4.8.2.2 (7) and 4.8.3.3 (7) for issuers with Norway as their home state, the reference to the Prospectus Directive's rules on home state in relation to reportable transactions has been removed, in line with a subsequent legislative amendment.

Euronext Securities Porto offers a new feature for the registration of closed-end funds, intended for both management companies and Participants holding Units of Participation.

As a result, the procedure for closed-end fund registration requests (currently handled via file exchanges/emails) will be exclusively carried out directly in the reserved Euronext Securities Porto customer area – My INTERBOLSA – in an automated, fast, and secure manner.

Additionally, user access requests for the My INTERBOLSA reserved area can be sent to clientservice-es-pto@euronext.com. To do so, simply send "Annex I" of the membership agreement, available on our website, on the How to Become a Member | Euronext Securities Porto page.

Support manuals for this new feature will be available in My INTERBOLSA, under the “My Useful Information” menu.

As the holder of an option has a right, and the seller has a potential obligation, the holder needs to pay a certain amount of money to the seller. The price of the option, or the premium, is determined by two sets of variables: contract-specific variables and market-specific variables. Discover how these variables impact the price of an option and how option prices are calculated.

Learn how the option price, or premium, is determined and calculated

Premium & Valuation explained in detail

The premium paid by the buyer and received by the seller

In addition to their potential intrinsic value, options also have another element of value: the option premium. The premium has to be paid by the buyer, which is then transferred to the option seller. To a certain extent, the purchase of an option contract can be compared to the acquisition of an insurance policy, where a premium is charged by the insurance seller. The insurance buyer pays the premium in advance of the period during which the insurance agreement is valid. The contract embeds a potential claim, which will only be lifted if certain conditions are met.

Compensation for a potential obligation

The option holder has a right. The option writer takes the risk for a potential obligation, for which the option writer receives a financial compensation. This is called the option premium. The potential obligation to take or make delivery incorporates risk. This is why the writer needs to receive a premium from the option buyer.

The premium is dependent on a series of factors

The option premium (price) is based on the price of the underlying value and the movement of that price (volatility), but also on factors such as the remaining lifetime of the option, and on supply and demand in that particular option series.

How price volatility impacts the value of options

The higher the price volatility, the larger the price risk, but that also means more opportunity. In the case of high price volatility, the chance of a significant price change is large. Price volatility must be considered when pricing an option. The future price volatility must be included in the pricing process.

The price of the underlying asset vs the strike price

The strike price is the price at which that underlying value can be transacted as stated in the option agreement. Obviously, the strike price must be compared to the price of the underlying value. In case the price of the underlying value exceeds the strike price at expiration, a call option has intrinsic value. On the contrary, when the price of the underlying value is below the strike price, a put option has intrinsic value.

Higher premium for long-term options

The longer the time to maturity, the more time there is for the price of the underlying asset to make a move. In other words, the longer the time to maturity, the more chance there is for the price of the underlying value to change and the more significant this move can be. Therefore, long-term options are priced at higher premiums than short-term options.

Cost of carrying the underlying asset forward in time

A Rational market participant should be indifferent to buy an asset now or in time. Pricing of products should be accordingly. Therefore, the forward price or future price should be equal to the ‘spot price’ plus cost of carrying the underlying asset forward in time. The cost of carrying a stock forward in time are the cost of capital (interest) minus the financial compensation (dividend). Interest raises the future or forward price of an asset. A higher future price will lead to a higher value of call options and a lower value of put options. Dividend payments lower the cost of carrying an asset forward in time because the holder of the security faces a cash inflow. Such cash inflows lower the future or forward price of an asset.

Option style, a driver for the value of an option contract

European-style options can only be exercised at expiration. American-style options may be exercised during their lifetime, but at the latest at expiration. When an option is exercised before maturity it is called “early exercise”. Early exercise is often performed for equity options on the day before the underlying share will be traded ‘ex-dividend’. The more flexibility an option offers, the higher its price. Hence, American style options are priced (somewhat) higher than European style options.

Premium components: intrinsic value and time value

The premium or value of an option consists of two components: the intrinsic and the extrinsic value. The extrinsic value is also known as “time value” or “expectations value”. The time value is the extra premium on top of the intrinsic value. The time value reflects the possibility of a possible move beyond the strike price before the option expires. At expiration of an option, only intrinsic value applies, if it applies at all (i.e., only when the option is “in-the-money”).