The international derivatives exchange Eurex has started trading of single stock dividend futures.
For the first time, the pure dividend component of the underlying stocks of a benchmark equity index is available for exchange trading and clearing as a standalone product in Europe.
The launch was supported by Société Générale, which provides two-way prices in all 25 products throughout the day in these new products.
Eurex recorded already first trading volume during the morning. The new futures contracts cover the annual dividends of 25 of the constituents of the European benchmark index Dow Jones Euro Stoxx 50. The exchange intends to list the remaining 25 constituents on 1 March 2010 and will continue to seek additional liquidity providers over the coming weeks.
Peter Reitz (pictured), member of the Eurex executive board, says: “Société Générale as first market maker in the new dividend futures will strongly contribute to the liquidity of these contracts from launch. Société Générale as one of the largest participants in the over-the-counter market in this asset class adds further credibility and acceptance to the new futures contracts that will likely attract significant investor interest going forward.”
The launch extends the introduced index dividend futures on the Dow Jones Euro Stoxx 50, launched in June 2008. The Dow Jones Euro Stoxx 50 Index dividend futures currently trades around 10,000 contracts daily, volume in 2009 was over 2.5 million contracts.