Listing on 18 October 2010/ Existing Euro BTP Future to be complemented
The international derivatives exchange Eurex announced today that it will be launching a new future that is based on notional short-term debt instruments issued by the Republic of Italy (Buoni del Tesoro Poliennali – BTP) on 18 October 2010. The contract will complement the Eurex benchmark interest rate derivatives family; along with the existing 10-year Euro BTP Future, the short-term BTP contract will serve as an appropriate hedging instrument for all non-triple-A-rated European government bonds as well as for other interest rate instruments (such as swaps). Following the launch of the new future, the short-term Italian government bond market will additionally benefit from the ensuing increase in basis and repo trading opportunities. Spread trading strategies will also be possible, thereby enhancing trading volumes in both futures.
"The success of the Euro BTP Future we launched in September 2009 underlines the market needs for a complementary short-term hedging instrument," said Peter Reitz, member of the Eurex Executive Board. "Since its launch, more than 1.3 million contracts have been traded in our Euro BTP Future. This shows that market participants are actively using our contract as a hedging instrument for government bonds with a non-triple-A-rating."
The short-term Euro BTP Future will be based on deliverable bonds with a remaining maturity of 2 to 3.25 years and have a notional coupon of 6 percent as well as a contract value of EUR 100,000. The minimum tick size will be 0.01 percent (EUR 10 per tick) in line with the tick sizes of the BTP, Bund and Bobl futures. Trading hours will be from 8:00 a.m. to 7:00 p.m. CET.
Eurex will also be offering a market-making program. Various banks have already shown an interest in market-making to provide sufficient liquidity from the outset.
