IntercontinentalExchange (NYSE: ICE), a leading operator of global futures exchanges and over-the-counter (OTC) markets, announced today that ICE Futures U.S.(TM) will launch million-currency-unit versions of 12 existing foreign exchange (FX) futures contracts in November 2008. The new futures contracts, known as ICE Millions, uniquely combine the benefits of futures and OTC products, bringing transactional efficiencies and risk management opportunities to the growing FX marketplace. The contracts will be sized at ten times the notional value of the existing suite of ICE FX futures and options contracts. ICE Futures U.S. also lists the U.S. Dollar Index(R) futures.
"Institutional traders, hedge funds, commodity trading advisors and retail traders have been seeking greater efficiencies in terms of cost, transparency and straight-through processing in the FX markets," said Ray McKenzie, vice president and head of Sales for ICE Futures U.S. "By offering futures contracts that mirror cash market trading conventions, but with enhanced efficiency and the vital benefits of centralized clearing, ICE Futures U.S. will bring a valuable new FX tool to market participants globally."
The following contracts comprise the suite of 12 FX pairs:
Million Euro – Million Euro –
U.S. dollar (IEO) British pound (IGB)
Million British pound – Million Euro –
U.S. dollar (IMP) Canadian dollar (IEP)
Million U.S. dollar – Million Euro –
Canadian dollar (ISV) Japanese yen (IEJ)
Million U.S. dollar – Million Euro –
Japanese yen (ISN) Swedish krona (IRK)
Million U.S. dollar – Million Euro –
Swiss franc (IMF) Swiss franc (IRZ)
Million U.S. dollar – Million Aust. dollar –
Swedish krona (IKX) U.S. dollar (IAU)
The contracts will trade electronically on the ICE trading platform, which features the fastest trade execution times in the futures industry today. Contract prices will be quoted using over-the-counter market convention; for example, the Million Euro-U.S. dollar contract will be quoted in U.S. dollars per Euro to five decimal places. The standard rate for ICE Millions futures contracts is $1.35 per side, or per million currency unit, inclusive of exchange and clearing fees.
The primary benefits of the ICE Millions contracts include:
— Transaction cost efficiencies when compared to existing futures and OTC
FX offerings;
— Deep liquidity with professional market makers;
— Centralized clearing and transaction anonymity, both of which are
inherent in futures market transactions;
— Simplicity of hedging cash market exposure with OTC-style contract
design and quotation methodology for funds and proprietary traders who
are active in the cash FX markets;
— Elimination of the need to roll daily cash positions;
— Fungibility at a ten-to-one ratio with the existing ICE FX contracts.
