The Korea Exchange (KRX) has launched the EURO STOXX 50 Futures, which is the second Asian venue this week to adopt the instrument for its clientele. The futures were formally listed and denominated in the Korean won, which are available for trading with immediate effect, according to a Korean Exchange statement.
The extension of the EURO STOXX 50 instrument to an Asian exchange is the second such move this week, after the index and futures was adopted by the Hong Kong Exchange (HKEx) Wednesday, via the iShares listing. Both moves are designed to expand the EURO STOXX 50 into new regions, as the instrument has remained one of the most popular in Europe over the past few years.
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The EURO STOXX 50 Index was originally launched back in 1998 and has since grown into one of the exchange’s most widely traded instruments. Presently, the index represents a total of fifty supersector leaders across a panel of twelve eurozone countries. One of the indexes draws its versatility and resilience in the market, which is garnered by a free-float market cap, with each component’s weight capped at 10% of the index’s total free-float market cap.
For its part, the EURO STOXX 50 Futures are the first listed derivative product based on a foreign equity index and will help the Korean Exchange establish itself as an Asian financial hub. The instrument’s adoption is also important as it helps foster a favorable environment for domestic investors to trade and engage with foreign derivatives by reducing transaction costs and foreign exchange risk.