The international derivatives market Eurex Exchange will introduce the second tranche of derivatives on global MSCI indices on 1 July.
Futures and options based on the MSCI World, MSCI Europe, MSCI AC Asia Pacific ex-Japan and futures on the MSCI Frontier Markets have been available since 11 March. Around 20,000 contracts have been traded in these products since market launch.
Effective 1 July, futures and options will be offered based on the following regional indices: MSCI Emerging Markets, the leading index for this segment, and the regional sub-indices MSCI EM EMEA, MSCI EM Latin America and MSCI EM Asia. Futures are also being launched on 16 emerging market country indices. The planned expansion will increase the existing offering of equity index derivatives to around 100.
“Our high liquidity for index derivatives means we can offer our participants significant capital efficiencies in the area of margin payments with the associated cost advantages,” says Peter Reitz (pictured), member of the Eurex executive board. “At the same time, we are the only stock exchange in the world to offer options as well as futures on regional MSCI indices.”
All MSCI index contracts (except the euro-denominated MSCI Europe) are USD-denominated contracts with cash settlement. Maturities of up to 12 months are offered for futures and up to 24 months for options.
Several market makers will provide liquidity in the order book depending on the index contract. As a further incentive, Eurex Exchange will not charge trading and clearing fees for the 20 new contracts until the end of October 2013.