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Moscow Exchange Adds Mini MICEX Index Futures Contracts

The lowered initial margin requirements are opening the market for smaller participants keen to trade one of the most volatile

Starting from next Monday, the 27th of August, the Moscow Exchange will be adding a new mini contract to its line up. The MICEX mini futures contract will start trading under the ticker MXI with its price matching the levels of the main MICEX index contracts.

What is most appealing to smaller traders out there is the specification of the contract which allows for Moscow Exchange to charge the traders 30 kopecks per contract which is a very competitive price with one ruble currently valued at $0.015.

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the new contract is designed to meet the needs of a wide range of private investors implementing rouble strategies

With the tick value standing at 0.05 index points or 50 kopecks, an expanded set of private investors will gain access to the lucrative Russian market. With the recent slump in oil prices the Russia’s economy has lost momentum and its currency has been under pressure ever since the escalation of tensions in Ukraine.

While the prospects are looking dire and the oil prices slump has substantially lowered the real incomes of Russian households, a research note from Barclays highlighted recently, “Monthly data suggest an improvement in momentum is underway. Consumption and investment declines appear to be pausing.

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The Moscow Exchange will be offering futures with settlement dates in December 2015 and March 2016, with options contracts included. Futures will be expiring in October, November and December 2015 and January, February and March 2016.

The Managing Director of the Moscow Exchange Derivatives market, Kirill Pestov, said in the company’s official announcement, ”The new contract is designed to meet the needs of a wide range of private investors implementing rouble strategies on the equity market who seek to avoid foreign exchange risk.”

“The small tick size will also be valuable to algorithmic traders, which became significantly less active following the doubling of the tick size for RTS Index futures”, he added.

The market makers for this contract will be ALOR+, IT Invest, BCS and Best Efforts Bank. The liquidity for the contracts will be provided in the main and additional sessions for 400 and 200 contracts. the options contracts market makers will begin operating from the 15th of September 2015.

The launch of the MICEX mini contract will predate the closing of trading of the main futures contract MICEX, which will be phased out in June 2016.

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