IntercontinentalExchange (NYSE: ICE), a leading operator of global futures exchanges and over-the-counter (OTC) markets, announced the successful transition of the U.S. Russell Index complex to ICE Futures U.S.(TM) In June 2007, ICE signed an exclusive license agreement with Russell Investments. This agreement gives ICE exclusive rights to offer futures and options contracts based on Russell’s industry-leading U.S. equity indexes, including the Russell 1000(R) Index and Russell 2000(R) Index, as well as the related value and growth indexes offered by Russell. Since the beginning of September, over 2.7 million Russell futures and options contracts have traded on the ICE platform. As of Friday, September 19, open interest in mini equivalent Russell contracts stood at 590,868 compared with 141,111 on September 2.
"We’ve enhanced our business by diversifying into new markets and executing on our plans to successfully expand and compete in a wide range of markets," said Jeff Sprecher, ICE chairman and ceo. "We are proud to have the U.S. Russell Index futures complex as the cornerstone of our long-term strategy within the equity index segment. With the Russell 2000 contracts transitioned to ICE, we look forward to marketing and growing other key products within the valuable Russell suite."
"The transition reflects the industry’s reliance on the Russell indexes as key benchmarks. In a short time, ICE’s marketplace and platform have proven to deliver value in the dynamic equity index markets," said Kelly Haughton, strategic director of the Russell Indexes. "ICE has already demonstrated its commitment to building the Russell complex and to bringing effective risk management processes and marketing resources to our indexes. We look forward to continuing our work with the ICE team in capitalizing on the increasing investor interest in the Russell Index futures and options markets."
In addition to its robust platform which offers round-trip futures trading in an average of 3 milliseconds, ICE has delivered a number of tools to better accommodate the Russell Index trading community:
— Average price transactions (APT) allow trading firms to execute trades,
including calendar rolls, at multiple prices, and allocate the trades
across client accounts at a single price.
— Trade at Index Close (TIC) and block trades were also implemented,
allowing a broad range of market participants to use various trading
and risk management strategies in ICE’s markets.
— ICE Clear U.S. signed a cross-margining agreement with the Options
Clearing Corporation (OCC) providing customers with risk-reduction
capabilities and capital efficiencies across the equity index futures
and equity index options markets.
For over 25 years, Russell’s innovative index methodology has helped its indexes become the benchmarks most used by institutional investors. Today, institutional investment professionals responsible for over $4 trillion in assets use Russell indexes to guide their portfolios, which account for 63% of institutional benchmarked products. The Russell 2000 index consists of approximately 2,000 small-cap companies, and the Russell 1000 is a large-cap index representing the largest one-third of the U.S. broad market Russell 3000(R) Index components.