Eurex, the derivatives exchange owned by Deutsche Börse, has announced strong growth in the Eurex KOSPI contract just over one year after its launch on 30 August 2010.
The Eurex KOSPI is a daily futures contract that allows investors to gain exposure to Korea's blue chip index during European trading hours. The contracts expire at the end of each trading day and any open positions are then transferred to the Korea Exchange to establish a position in the KOSPI 200 option.
There are now 21 Eurex members trading the KOSPI derivative, compared to 12 when the offering was first introduced.
Since launch, Eurex says that volume in the contract has grown steadily, with average daily volume (ADV) peaking at 108,000 contracts in August 2011, the first time ADV exceeded the 100,000 contracts. A one-day record was also reached last month, with 207,953 contracts traded on 4 August.
The exchange added that the appointment of two dedicated market makers for the KOSPI contract had contributed to a narrowing of bid-ask spreads.
“Our Eurex KOSPI Product has successfully established itself in the market within one year, exceeding our initial expectations,” said Michael Peters, Eurex executive board member. “This is due to our close partnership with the Korea Exchange, our joint customer consultation and the innovative offering we have jointly created. Our participants do not only trade via the order book but also use our block trading functionality, which allows members to place OTC transactions directly and efficiently into the Eurex clearing system.”
“The Eurex KOSPI Product has become an efficient risk management tool for global investors participating in the Korean market,” added Jin-Gyu Kim, KRX president & COO. “As a result, this innovative product is seen as one of the most successful offerings introduced in the framework of exchange and clearing house cooperation.”