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New records for Eurex as 1.9 billion contracts are traded in 2007

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The international derivatives exchange Eurex ended 2007 with record turnover of more than 1.9 billion contracts, a year-on-year increase of some 25 per cent from 1.5 billion in 2006 and co

The international derivatives exchange Eurex ended 2007 with record turnover of more than 1.9 billion contracts, a year-on-year increase of some 25 per cent from 1.5 billion in 2006 and corresponding to a daily average trading volume of 7.5 million contracts, compared with 6 million the previous year.

The fixed income derivatives segment rose from a total of 731 million in 2006 to 771 million. The Euro-Bund future remained the highest-turnover product with some 338 million contracts, a slight increase from 320 million.

The segment equity index derivatives enjoyed the highest growth rate in 2007 at about 55 percent, rising from 487 million to 754 million contracts. The future on the DJ Euro Stoxx 50 saw turnover growth of 53 per cent to 327 million contracts.

The equity derivatives segment, comprising options and single stock futures, accounted for more than 374 million contracts, an increase of 22 percent from 308 million in 2006. Single stock futures rose from 35.6 million contracts in 2006 to 52.4 million.

In December, 118 million contracts were traded, up by 12 percent from 106 million in December 2006. Equity index derivatives recorded the highest turnover among all product segments in December with 55 million traded contracts, compared with 40.4 million a year earlier. The future on the DJ Euro Stoxx 50 index accounted for 25.6 million contracts, a 38 percent increase from December 2006.

A total of 19.7 million contracts were traded in equity derivatives in December, compared with 15.9 million a year earlier, while 43.5 million contracts were traded in the fixed-income derivatives segment, including 18 million contracts on the Euro-Bund Future, 10.8 million on the Euro-Bobl Future and 10.6 million on the Euro-Schatz Future.

Eurex Repo, which operates Swiss franc and euro repo markets, set new records in December in its money market segment Euro GC Pooling. Daily outstanding volume reached a peak of EUR31.7 billion on December 7 and outstanding volume across the month averaged EUR22.8bn, up 156 percent from EUR8.9bn in December 2006. All Eurex Repo markets set a new record with an average outstanding volume of EUR98.7bn, an increase of 25 percent.

Last month Eurex and International Securities Exchange Holdings, parent of the ISE, announced the completion of Eurex’s USD 2.8bn acquisition of the US electronic exchange operator, following the receipt of regulatory approval from the Securities and Exchange Commission.

The ISE will continue to be regulated by the SEC as a registered national securities exchange and to operate under the existing management team as an independent subsidiary of Eurex, whose chief executive, Andreas Preuss, will join the ISE’s board of directors.

With the addition of ISE, the world’s largest equity options exchange, Eurex will significantly expand its liquidity network into the US and into US dollar products. The combined organisation will be the market leader in individual equity and equity index derivatives worldwide.

Eurex says the combination will provide growth opportunities through the cross-selling of existing products and through the future development of joint products, the first of which are due to be announced early in the year. Currently, the ISE and Eurex distribute their products to approximately 560 direct exchange members.

According to the latest figures, the ISE is on track to outperform expectations for 2007. In November, its average daily volume reached a new record of 4.3 million options contracts and year-to-date volumes increased 35 per cent to 741.6 million options contracts, from 548.8 million contracts in first 11 months of 2006.

‘We have successfully completed a transaction which will expand Deutsche Börse’s leading position in the fast and steadily growing global derivatives markets,’ says chief executive Reto Francioni. ‘The acquisition will further fuel our strong growth prospects and create value for our shareholders.’

Adds Preuss: ‘Our strategic vision is to organise markets globally. ISE has a very strong presence in the U.S. market and the combination is a significant step in expanding our global multi-asset class liquidity network. ISE will maintain a high level of self-responsibility as an independent market under the ISE brand and management.’

The ISE’s markets portfolio consists of an options exchange and a stock exchange. Its equity options trading venue offers equity, ETF, index, and FX options, while the ISE Stock Exchange trades approximately 6,000 products, and provides the opportunity for continuous price improvement through the interaction of its non-displayed liquidity pool, MidPoint Match, and its displayed stock market.

ISE Alternative Markets is scheduled to launch in 2008 and will offer an events market trading platform for derivatives auctions. The group’s products also include a portfolio of proprietary indexes and enhanced market data products for sophisticated investors.

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