The international derivatives exchange Eurex expands its sector index products segment by adding global sector futures denominated in US dollar, and will in future cover the European real estate industry with futures and options as well. As of 18 August 2008, futures are available on the five global sector indices Dow Jones Banks Titans 30SM, Dow Jones Insurance Titans 30SM, Dow Jones Oil & Gas Titans 30SM, Dow Jones Telecommunication Titans 30SM and Dow Jones Utilities Titans 30SM. Furthermore, as of 18 August, a futures contract on the Dow Jones Global Titans 50SM Index in US dollar complements the existing futures contract in euro.
Moreover, on 22 September, Eurex will launch equity index futures and options on the Dow Jones EURO STOXX® Real Estate and Dow Jones STOXX® 600 Real Estate indices. Both new futures on the real estate indices will be included in the existing market-making programs for sector index futures and sector index options.
Peter Reitz, member of the Eurex Executive Board, said, "Investments in sectors have been gaining considerably in importance for some time now, with sectors becoming more and more global. We are addressing increasing globalization and the trend towards growing sector coverage in advance. We are the first derivatives exchange in the world to offer our clients hedging opportunities for global sectors with our five new Titan futures."
Concerning the two real estate derivatives, he added: "We are also offering our clients investment opportunities in a new asset class – real estate – for the first time. The futures and options on the Dow Jones Real Estate indices allow hedging and investment strategies in the European real estate sector."
Since the introduction of the first Eurex sector products in 2001, the trading volume in these products has continuously increased; in the first six months of 2008, almost five million contracts were traded with investor focus in the last two years increasingly shifting from the euro to the pan-European area. Open interest in options and futures on sector indices is currently at approx. 544,000 contracts, which corresponds to a nominal value of nearly 9 billion euro. These segment figures are the highest among all exchanges and prove Eurex’ market leadership.
The underlying Dow Jones Sector Titans indices comprise the 30 largest companies of the respective global sectors; and, secondly, on the real estate equity indices for the euro and the pan-European area, which as of September will be calculated by STOXX as its own independent index. The product launches enable trading in a total of nineteen different industries among the global sectors banking, oil & gas, insurance, telecommunications and energy.
Similar to the existing sector products, all newly launched futures are settled in cash. The expiration dates for the futures are also in March, June, September and December. The contract size of the new sector products was structured analog to the European sector products already successfully in existence. A Titans sector tick corresponds to a value of US$10, whereas a real estate derivative tick corresponds to a value of €5.
