Euronext has launched AtomX, a flexible service that offers the efficiency and security of the regulated market and central clearing to bilaterally negotiated trades.
Through AtomX, investors are now able to customise and trade options and futures which will be cleared, via LCH Clearnet, in the same clearing pool as the other Euronext derivatives positions.
The regulatory agenda calls for more transparency and mitigation of the recognised systemic risk posed by over-the-counter (OTC) derivatives. At the same time market participants are looking for more efficiencies in portfolio management. AtomX facilitates this by combining the flexibility of OTC trading with the capital and operational efficiencies of the regulated market. Moreover it provides new opportunities to further develop and expand on-exchange derivatives trading, as it will appeal to a broader section of the trading community.
AtomX provides new flex functionality whereby investors can choose their own product style, type, strike price and expiration dates outside the standard expiry time set. The flex expiration dates are currently limited to the third Friday of the month. In a later phase a fully flexible choice of expiration dates will be available. AtomX already offers reporting of trades in more than 900 flex contracts on top of all standard financial derivatives contracts available in the central order book.
Adam Rose (pictured), Head of Financial Derivatives at Euronext, says: “Clients are under significant pressure to find capital efficient solutions whilst maintaining much of the flexibility that OTC contracts provide in allowing them to meet their trading objectives. Through this service we can immediately offer efficiencies to clients trading bespoke equity derivatives contracts on our products. In addition we are also in discussions over new products that we can add to the service to bring more benefits to the marketplace.”
Christopher Meyers, Institutional Trading UK and Benelux of Flow Traders, says: “As a global technology-enabled liquidity provider we are constantly looking for ways to make our index futures trading as efficient as possible within an ever changing environment. Therefore we are pleased Euronext is introducing this service which enables us to combine the flexibility of OTC trading with the advantages of the regulated market.”