Eurex Launches MOC Futures
Eurex, one of the leading derivatives exchanges and part of Deutsche Börse Group, launches another innovative product to support market participants in electronifying their trading business. As of 30 October, Eurex Market-on-Close (MOC) futures provide a concept to trade index futures at a price level directly linked to the underlying cash market index close, prior to its actual publication.
”This is of particular importance to investors using or offering benchmarked products like swaps or Exchange Traded Products. They utilize index futures at the index close level for hedging purposes, but require a more granular futures pricing than in the regular index futures trading to avoid slippage costs“, says Mehtap Dinc, Member of the Eurex Executive Board and Head of
Derivatives Product Research & Development at Deutsche Börse Group.
Eurex designed MOC futures to boost efficiencies and to further support the regulatory agenda by facilitating the migration from OTC instruments to the transparent on-exchange environment. As a first step, the exchange launches MOC futures on the Euro STOXX 50 index futures, one of the most liquid index futures globally. Europe’s leading blue-chip index for the Eurozone covers
50 stocks from 11 Eurozone countries. It is licensed to financial institutions to serve as underlying for a wide range of investment products such as Exchange Traded Products, futures, options and structured products worldwide.
Eurex MOC futures represent the basis, e.g. the difference between the current futures price and the current index cash price. Trading in Eurex MOC futures is offered during the trading day up until the cash market index close level is determined. After publication, the exact index close level is added to the traded price of the basis (Eurex MOC futures) to calculate the final settlement price with up to two decimals accuracy. Physical settlement into the Euro STOXX 50 index futures takes place one hour approximately after close of the European cash markets. Post settlement, the Euro STOXX 50 index futures will be
immediately available to market participants.
Execution of Eurex MOC futures will be possible in the order book and via Eurex’ Trade Entry Services. Following the trade of Eurex MOC futures, Eurex Clearing offers immediate risk management and efficient clearing solutions.
The derivative platform closed its second funding round this month.
Key challenges include the cost of legacy systems and new regulatory mandates.
Exchange operator hires in Europe and Asia.
Is Eurex gaining market share from LCH?
SGX’s derivatives market now has 58 Trading Members and 24 Clearing Members.