Arm Holdings options to come to market starting Monday

By Saqib Iqbal Ahmed

NEW YORK (Reuters) -Options contracts on SoftBank's Arm Holdings, will debut on Nasdaq's exchanges on Monday, offering investors a new way to bet on the fortunes of the year's biggest initial public offering.

Nasdaq plans to list options on Arm Holdings across all six of its exchanges, a spokesperson for the exchange said on Friday.

Other options exchange operators, Cboe Global Markets and Intercontinental Exchange's New York Stock Exchange, did not immediately respond to a Reuters request for comment on their own plans to list ARM options. However, exchanges typically tend to list options around the same time.

Nasdaq recently reduced the time required to list and trade options on certain securities following an IPO to as early as on or after the second business day following the offering.

Analysts expect robust demand.

"I have every reason to believe that when ARM options are listed they will be very popular," Steve Sosnick, chief strategist at Interactive Brokers, said.

The 2012 listing of options on Facebook Inc, now known as Meta Platforms, holds the record for the most active options market debut with some 360,000 contracts changing hands on the first day of trading.

While Arm Holdings, some of whose chips have artificial intelligence (AI) applications, is not a household name like Facebook, retail traders are likely to flock to the options due to the buzz generated around the IPO and general investor enthusiasm related to the theme of AI, Sosnick said.

If the stock continues to experience big moves, it bodes well for options demand. The shares hovered around $63.55 on Friday afternoon, after closing up almost 25% from its IPO price on Thursday.

Arm Holdings is of significant interest to retail investors, Dan Raju, chief executive at online brokerage firm Tradier, said.

"Most retail investors are closely watching the initial surge and the tapering of volumes of shares after the IPO. I expect the listing of options to also see an initial surge in options activity followed by a tapering," he said.

(Reporting by Saqib Iqbal Ahmed; Editing by Richard Chang)