Eurex, a global leading derivatives exchange and integral component of the Deutsche Börse Group, has tendered a new agreement with the Korea Exchange (KRX), thereby extending a cooperation by a joint listing across each respective exchange, according to a recent Deutsche Börse statement.
Per the agreement, Eurex will list the Mini KOSPI 200 index futures during its trading hours, while KRX will also see the trading and clearing of the Euro STOXX 50 futures with the Korean Won. The joint initiative is designed to help create a night-time market for both futures and options products, thereby extending one of each exchange’s marquee product offering to broader market.
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In particular, the newly launched Mini KOSPI 200 futures on Eurex are based on the KOSPI 200 index, which will complement an existing Eurex/KRX collaboration for KOSPI 200 options – this is important for users as they will be able to successfully gain access to a more diversified set of Korea-related futures and options via the same platform.
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KOSPI 200 options have been one of Eurex’s strongest performing instruments, notably in Q1 2016 – this corresponded to a daily average of 108,801 contracts during this period. Conversely, the Euro STOXX 50 index has etched out a role as one of Korea’s most traded structured products market. In 2015, the index was the most widely traded foreign index derivative among Korean investors.
Meanwhile, for the KRX, the launch of Eurex’s Euro STOXX 50 futures using the Korean Won will be the first derivative product based on a global benchmark index for the first time in its history as an exchange, with a product specification to be as similar as possible to Euro STOXX 50 futures.
According to Jeffrey Tessler, member of Deutsche Börse’s executive board, in a statement on the joint offering: “This strategic cooperation between KRX and Eurex is very beneficial for both Eurex and KRX customers. With the introduction of Mini KOSPI 200 futures, investors will be able to trade and hedge the Korean market with an additional Korean product 24 hours a day.”
“KRX will list EURO STOXX 50 futures as its first derivative product based on a foreign equity index. By listing the contract, KRX will establish the foundation to be the Asian derivatives hub,” added Kyungsoo Choi, Chairman and Chief Executive Officer (CEO) of Korea Exchange, in an accompanying statement.