European stock exchange operator Euronext has launched a new service which aims to give investors an alternative to increasingly expensive OTC derivatives.
The AtomX platform will give investors the ability to customise and trade options and futures in the same clearing pool as other Euronext derivatives positions. This has been achieved through the combination of flexible OTC trading and features of the traditional regulated market.
Under the new service, AtomX will allow investors to chose their own product style, type, strike price and expiration dates outside of the standard expiry time currently set.
The move comes in response to an increasing number of calls for greater clarity of the current risk posed by OTC derivatives as well as a demand from investors for alternatives to help them with portfolio management.
Adam Rose, Head of Financial Derivatives at Euronext, spoke of the benefits of integrating the system.
“Clients are under significant pressure to find capital efficient solutions while maintaining much of the flexibility that OTC contracts provide in allowing them to meet their trading objectives.”
“Through this service we can immediately offer efficiencies to clients trading bespoke equity derivatives contracts on our products.”
“In addition we are also in discussions over new products that we can add to the service to bring more benefits to the marketplace.”
In launching the AtomX service Euronext have tried to bridge the OTC and listed derivatives worlds. Following in the footsteps of Eurex, CME and ICE who have launched products such as swap futures to offer investors exchange traded alternatives.
Christopher Meyers, Institutional Trading UK and Benelux, Flow Traders, also spoke about the expected benefits of the AtomX platform.
“As a global technology-enabled liquidity provider we are constantly looking for ways to make our index futures trading as efficient as possible within an ever changing environment,” he said.
“We are therefore pleased that Euronext is introducing this service which enables us to combine the flexibility of OTC trading with the advantages of the regulated market.”
By Paul Walsh, Staff Writer