Eurex Exchange

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Eurex Exchange
Eurex-Logo.svg
Type Derivatives exchange
Location Eschborn, near Frankfurt am Main, Germany
Founded 1998
Owner Deutsche Börse AG
Key people Members of the Board: Thomas Book (CEO), Michael Peters, Brendan Bradley, Mehtap Dinc, Gary Katz, Peter Reitz
Website www.eurexchange.com

Eurex Exchange is an international derivatives exchange that is headquartered in Eschborn, Germany, near Frankfurt am Main. It is operated by Eurex Frankfurt AG and Eurex Zürich AG, which are public companies wholly owned by the German stock exchange operator Deutsche Börse AG.

Eurex Exchange, Eurex Clearing, the largest European clearing house, the New York-based International Securities Exchange ISE, the ECNs (Electronic Communication Networks) Eurex Bonds and Eurex Repo, as well as the European Energy Exchange EEX together form the Eurex Group.

Eurex Exchange is the largest European derivatives exchange and the third ranked globally as measured by traded volume (2014).[1] As of January 2016, the average number of contracts traded daily was 7.2 million.[2] In total, it lists about 2,000 products in nine major asset classes including equity, equity index, interest rate, volatility, dividend, FX, ETFs, commodity and property. The company is well known for its benchmark products among them futures and options on the DAX® Index, EURO STOXX 50® Index, a variety of MSCI indexes and Euro-Bund, Euro-Bobl and Euro-Schatz.

History[edit]

The exchange was established in 1998 with the merger of Deutsche Terminbörse (DTB, the German derivatives exchange) and SOFFEX (Swiss Options and Financial Futures), which were both founded in the late 1980s. Eurex Exchange was an early proponent of electronic trading. The so-called “Battle of the Bund” in the late 1990s, during which traders moved their volume from the open outcry trading pits at London Financial Futures Exchange (LIFFE) to the all-electronic Eurex Exchange is widely recognized as pivotal to the success of electronic trading versus open outcry trading pits.

Trading technology[edit]

Trading at Eurex Exchange is fully electronic as opposed to traditional open outcry or pit trading. That means buyers and sellers transact from remote locations and are brought together through an electronic trading platform and network. Today, Eurex Exchange’s trading platform is based on the T7 trading architecture. This robust and reliable trading system connects more than 7,700 traders in over 35 countries, trading more than 7.0 million contracts daily.

Eurex Clearing[edit]

All transactions executed on Eurex Exchange are cleared through Eurex Clearing, which functions as a central counterparty (CCP) for multi-asset class clearing of exchange-traded and over-the-counter products. Central clearing seeks to reduce counterparty risk through a series of activities, including netting offsetting transactions, charging margin, monitoring firms’ creditworthiness and maintaining a guarantee fund that can be used in the event of a member failure. As a result of the financial crisis the G20 countries have extended regulation to include mandatory clearing for more and more OTC products such as interest rate swaps across geographies.

Eurozone fixed income coverage[edit]

The exchange launched futures and options on Italian (BTP in 2009) and French (OAT in 2012) sovereign debt futures in addition to its German Euro-Bund Futures to give investors more accurate hedging tools for lower-rated sovereign debt exposure. Together with short-term interest rate products, investors can hedge along the entire euro yield curve.

Market Data[edit]

Eurex publishes market data which can be used for audits, technical or quantitative analysis or to create trading models. Eurex publishes macroeconomic data, clearing data and daily statistics on the number of contracts traded, including daily volume, as well as the Open Interest and tick data.[3] Historical data for analysis and the development of back-testing trading strategies is also available through Eurex and through financial data vendors such as Quandl.[4]

References[edit]

  1. ^ Retrieved from: http://www.statista.com/statistics/272832/largest-international-futures-exchanges-by-number-of-contracts-traded/
  2. ^ AG, Eurex Frankfurt. "Eurex Exchange - Eurex Exchange". www.eurexchange.com. Retrieved 2016-02-03. 
  3. ^ AG, Eurex Frankfurt. "Eurex Exchange - Market data". www.eurexchange.com. Retrieved 2016-02-03. 
  4. ^ "Quandl Financial and Economic Data". www.quandl.com. Retrieved 2016-02-03. 

External links[edit]