Eurex expands equity index segment with USD futures
21 March 2016 Frankfurt
Image: Shutterstock
Eurex Exchange has launched new US dollar-denominated futures on the Euro STOXX 50 index.
The exchange, part of Deutsche Börse Group, has introduced Euro STOXX 50 quanto futures that allows investors to participate in the performance of the index without being subject to currency fluctuations between euro and US dollar.
The new quanto futures settle into the same level as the Euro STOXX 50 futures, which are the most liquid derivatives instruments in Europe, but with fees and margins being paid in US dollars.
Currently, quanto risks coming from US dollar denominated structured products are primarily hedged by banks via over-the-counter (OTC) forwards.
“With the new quanto futures, Eurex will offer an on-exchange alternative to the OTC market, enabling the trading of equity/foreign exchange correlation but also providing non-European clients the ability to trade European equity exposure in their preferred currency,” explained Mehtap Dinc, member of the Eurex executive board, responsible for product development.
At market launch, Eurex began offering a special market-making programme to incentivise order book liquidity.
The exchange, part of Deutsche Börse Group, has introduced Euro STOXX 50 quanto futures that allows investors to participate in the performance of the index without being subject to currency fluctuations between euro and US dollar.
The new quanto futures settle into the same level as the Euro STOXX 50 futures, which are the most liquid derivatives instruments in Europe, but with fees and margins being paid in US dollars.
Currently, quanto risks coming from US dollar denominated structured products are primarily hedged by banks via over-the-counter (OTC) forwards.
“With the new quanto futures, Eurex will offer an on-exchange alternative to the OTC market, enabling the trading of equity/foreign exchange correlation but also providing non-European clients the ability to trade European equity exposure in their preferred currency,” explained Mehtap Dinc, member of the Eurex executive board, responsible for product development.
At market launch, Eurex began offering a special market-making programme to incentivise order book liquidity.
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