The Bolsas y Mercados Españoles, (BME), the largest financial cash and derivatives trading venue in Spain, has extended the number of instruments linked to the popular IBEX 35 derivatives contract. The firm reported that it will be launching two instruments in March, offering traders both long and short contracts that reflect derivatives products such as certificates and ETF.
The new products offer traders ten to one leverage and provide users with access to new products and strategies. Under the family of IBEX contacts, the venue offers 20 alternatives, each with their own distinct features. The latest additions complement the firm’s LEVERAGE NET X3 product range.
In the official notification, the firm issued details on the contracts, which are defined as:
The IBEX 35® LEVERAGE NET X10, which offers ten times exposure to the daily return on the IBEX 35® NET RETURN, through the investment of an initial capital plus an equivalent loaned capital. A positive daily return on the IBEX35® NET RETURN yields an also positive return, but ten times that amount for the IBEX 35® LEVERAGE NET X10 and vice versa, if we refer to a daily calculation basis.
The IBEX 35® SHORT X10 would be linked to a multiplied by ten performance of the IBEX 35® TOTAL RETURN in the opposite direction, that is, a negative yield of the IBEX 35® TOTAL RETURN returns a ten times positive yield for the IBEX 35® SHORT X10 and vice versa, if we refer to a daily calculation basis.
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These new indices aim to serve as underlying assets for financial products, such as warrants, certificates and Exchange-Traded Funds (ETFs). The venue added: “These new indices provide investors with a broad range of investment strategies.”
The BME’s website provides a range of details relating to the IBEX 35 index and related indices. The IBEX 35 is the benchmark index that measures the performance of Spanish companies and provides investors and analysts a gauge on the health of the economy. The BME outlines the IBEX on its website: “The IBEX 35® is the index made up by the 35 most liquid securities traded on the Spanish Market, used as a domestic and international benchmark and as the underlying index in the trading of derivatives. Technically it is a price index that is weighted by capitalization and adjusted according to the free float of each company comprised in the index.”
The BME has been developing its systems and technology to cater to the growing number of automated traders. In December, the firm reported the inclusion of a new connection point in London’s Slough data centre thus giving traders low latency trading capabilities when accessing Spanish instruments.
The BME has seen a turnaround in trading volumes as the domestic economy picks up after years of slowdown in the aftermath of the 2008 recession, however the doom and gloom may still be present for Spain as its future could lie in the hands of fate that determine Greece and its position in Europe.