Bear, Stearns & Co is to use Thomson Financial's First Call operating earnings estimates as the reference for its new traded corporate earnings derivative product.
The new Bear Stearns' product will use a Dutch auction format using patented technology developed by Longitude to enable institutional participants to buy or sell options on a given US publicly traded company's earnings per share.
Settlement of the options will utilise Thomson's First Call operating earnings per share number, which is typically released shortly after a company releases its earnings.
Kevin Robik, head of trading, structured equity products group, North America and South America, Bear Stearns, says: "The technology provided to us by Longitude and the agreement with Thomson create an opportunity for Bear Stearns to deliver a unique new product."