Nasdaq is to launch US DV01 Treasury Futures, a new interest rate risk product trading on the Nasdaq Futures Exchange (NFX).
US DV01 Treasury Futures, or “the dollar value of one basis point,” will allow clients to hedge against the price sensitivity of a portfolio of cash market US Treasuries across the yield curve from 2-year to 30-year maturities. The new product will be available for trading on Thursday, 19 July, 2018, pending regulatory approval.
“Combined with our experience in the US Treasury cash markets on Nasdaq Fixed Income (NFI), the launch of US DV01 Treasury Futures moves us closer to our goal of helping our clients gain greater certainty of their US Treasury portfolio interest rate risk,” says Ted Bragg (pictured), Head of NFI at Nasdaq. “The US Treasury market needs additional instruments to help manage interest rate risk, and US DV01 Futures provides increased optionality and alternatives in the fast growing interest rate futures market.”
“Our NFX platform launched three years ago as an all-commodities exchange to expand on our existing global commodities business and provide more choice for clients,” adds Tom Wittman, Executive Vice President and Head of Market Services at Nasdaq. “Based on the growth of NFX and client feedback, we feel the next step is to expand into financial futures and work closely with the futures marketplace to build off the strength of our technology.”
As the deepest and most liquid government securities market in the world, the US Treasury market is highly reliant on and influenced by an array of economic factors.
NFI is the second largest dealer-to-dealer institutional trading venue for US Treasury securities. The six On-The-Run US Treasury securities are among the highest in volume and the most liquid financial instruments in the world. The US Treasuries cash marketplace is extremely efficient – there are over a dozen multi-billion dollar principal trading firms whose core strategy is to transfer liquidity between US Treasury trading venues at ultra-high speeds. In 2018, The Nasdaq Fixed Income trading platform will move to Nasdaq’s state-of-the-art matching engine, business functionality and protocol technologies – the Nasdaq Financial Framework.
Since 2013, Nasdaq has been one of the leading electronic trading platforms for cash US Treasury securities, providing real-time, intraday, end-of-day, historical and indicative data formats for US Treasury data. Treasury securities include Treasury bonds (T-bonds), Treasury notes (T-notes) and Treasury bills (T-bills) and US Treasury Floating Rate Notes.
