Eurex plans to add to its recent wave of product launches with new derivatives contracts and functionalities in the coming months.
The German exchange introduced swap futures, FX futures and options, and volatility contracts this year, following the industry trend of futurising OTC products, which are set to become more expensive to trade due to forthcoming European regulations.
Eurex now plans to follow those launches up with the first pan-European Secured Funding futures contract in November and enhancements to its Euribor futures.
The platform is also eyeing up more single-named US dividend contracts, additional FX currencies and is also in discussions over the potential cross-listing of more Asian indices, in addition to the Korean and Taiwanese contracts it already lists.
Eurex launched its FX suite in July this year with six pairs on four major currencies and while there hasn’t been significant uptake, Mehtap Dinc, member of the Eurex executive board and responsible for product development, said FX is a long-term commitment for the exchange.
“If you look at CME’s offerings in the US, they are liquid but it takes time,” she said. “ We have ambitions to extend coverage with additional currencies over time. We are also onboarding two more market makers.”
The FX launch challenges CME’s European offering which launched shortly before Eurex’s this year. Both exchange’s challenges lie with clearing members having to connect to CLS, the FX settlement system, in order to trade the products.
The extension of Eurex’s Euribor offering also poses a challenge to Liffe, which is the most liquid market in Europe for trading the product.
Eurex plans to add enhancements for packs and bundles, strips and futures strategies, as well as bringing more liquidity to the product in order to offer cross-margining between the future and OTC products which will soon be mandated for central clearing.
“What we were missing was full functionality, so we have added some of the missing pieces,” added Dinc.
She also explained that more clearing members are onboarding for swap futures, another product the exchange will support in the long-term as regulations force some buy-side firms to look for alternatives to the increasingly costly way of trading interest rate swaps.