Eurex Adds Quanto Futures as “alternative to the OTC market”

USD-denominated futures are launched on the Euro STOXX 50 index today.

Eurex, one of the world’s most recognised derivatives exchanges and part of Deutsche Börse Group, today introduced Euro STOXX 50 quanto futures. The new USD-denominated product enables investors to participate in the performance of the index without being subject to currency fluctuations between the euro and the US dollar.

The new quanto futures will eventually settle into the same level as the Euro STOXX 50 futures which are the most liquid derivatives instruments in Europe, except that fees and margins will be paid in US dollars. Currently, quanto risks coming from US dollar denominated structured products are primarily hedged by banks via OTC forwards.

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“With the new quanto futures, Eurex will offer an on-exchange alternative to the OTC market, enabling the trading of equity/FX correlation but also providing non-European clients the ability to trade European equity exposure in their preferred currency,” explained Mehtap Dinc, member of the Eurex Executive Board, responsible for Product Development.

Eurex has also announced that it will offer a special market-making program to incentivize order book liquidity at market launch with a number of participants already signalling their interest in market making.

With a trading volume exceeding 1.5 billion contracts a year, Eurex offers a broad range of international benchmark products, operating liquid fixed income markets and featuring open and low-cost electronic access.

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