CME Group, the derivatives marketplace, and Osaka Securities Exchange (OSE), the Japanese derivatives and securities exchange, have expanded their partnership on joint product development and promotion.
Under this arrangement, the companies will offer Japanese yen-denominated products for their global customer base. OSE will list futures contracts based on the Dow Jones Industrial Average (DJIA), and CME Group will offer an E-micro futures contract based on the Nikkei 225 average.
The OSE DJIA futures contract will be listed at OSE and traded on its J-GATE, derivatives trading platform by Q4 2011. The E-micro futures contract, which trade at a fifth of the size of the existing CME Nikkei 225 futures contract, will be offered on the CME Globex platform by early 2012.
The OSE previously listed DJIA futures until 2005, but decided to delist them “because they did not fit investors' needs of that time”. It has asked for comments to be submitted on the proposed specification of the DJIA futures.
DJIA futures will be traded according to the standard rules for stock index futures; the evening session for trading on the OSE was recently extended to run from 16.30 to 03.00 the following day, from 23.30 the same day. The extension was proposed to allow Japanese traders to access the market during periods in which price discovery occurs, namely during overseas markets' opening hours. A market maker scheme has been proposed to improve liquidity.
Craig Donohue, CME Group CEO, said, “The addition of yen-denominated futures based upon the Dow Jones Industrial Average at OSE and the E-micro Nikkei 225 contract at CME Group will provide market participants with nearly 24-hour access to global benchmarks sized for their needs and denominated in their currency of choice.”
Trading volume and trading value of sale and purchase by each type of investor will be disclosed separately from other stock index futures, and individual participants' trading volume and open positions will not be disclosed.