Open interest in swap futures products on US trading venue Eris Exchange has jumped 148% since January, as the number of contracts tips over the 50,000 mark, according to data from the exchange.
Eris, one of three US exchanges to offer swap futures alongside derivatives venues CME Group and IntercontinentalExchange (ICE), has extended the number of swap futures contracts from just over 20,000 at the start of January, to just over 50,000 at the start of September.
In a statement released this week, the exchange said its Eris Flex Swap Futures products continued to gain traction as year-to-date volume had increased to 18% of total volume on Eris.
July and August saw a significant rise in swap futures traded on Eris, with end of June open interest data showing just under 30,000 contracts, which spiked to over 50,000 by September. In August, volume of the Flex products reached 41% of total Eris volume.
Swap future products emerged last year, as CME, ICE and Eris launched similar product lines to meet a growing demand for futures products that mimicked certain standardised swaps, which faced increased oversight by regulators.
The need to centrally clear certain OTC derivatives in line with G-20 inspired Dodd-Frank Act rules to further reduce systemic risk in the financial system have altered how participants engage with the swaps market.
One key difference making swap futures attractive is the lower margin requirement. Listed futures typically require margin based on a one-day value-at-risk (VaR) calculation, while for cleared swaps margin is based on a five-day VaR, raising the cost for institutional investors that use the instruments for hedging purposes.