Futures contracts traded otc

Futures exchanges are innovating with swap-like products that seek to replicate the behavior of their OTC counterparts. Reflecting the growing demand for exchange-traded futures contracts as alternatives to OTC derivatives, IntercontinentalExchange launched four credit index futures contracts in May The contracts, which are based on the Markit CDX and Markit iTraxx indices, provide customers with the benefits of the fully-regulated futures markets while also serving a complementary role to the existing credit index swaps market.

The contracts are listed by ICE Futures U. ICE will introduce additional credit index futures contracts based on market feedback and demand. To support the development of these products, Quantifi, a provider of risk analytics, has developed a price-spread calculator to allow market participants to better monitor and manage credit risk exposures.

Available on the ICE website, the web-based price-spread calculator is designed to convert futures prices into the equivalent forward spreads for any given date. Regulatory reforms in the form of the Dodd-Frank Act, Emir and similar legislation have had an impact on market structures and volumes, according to a report by Deutsche Bank.

The key reform elements include requiring standardized OTC derivatives to be traded on exchanges or SEFs, be cleared through futures contracts traded otc counterparties, and reported to trade repositories.

Non-centrally cleared derivatives should be subject to higher capital requirements. ICE Swap Trade will offer index and single bbsp forex CDS across North American and European corporates and sovereigns with a choice of trading cleared and bilateral contracts.

Functionality will include request for quote RFQ and central limit order book.

Separately, ICE Clear Europe will introduce client clearing for European credit default swaps CDS after receiving regulatory delforexp delphi 7 in futures contracts traded otc U.

Client forex lessons for European CDS is expected to launch on October 7, and will be available for 43 European index and corporate single name CDS instruments.

OTC vs. Futures markets - regulation as a catalyst

Twelve clearing members will participate in the pre-launch testing. ICE has established risk frameworks for the clearing of its U. Markets Media was launched in to provide sophisticated, in-depth content spanning all sectors of the securities industry, delivered across a synergistic platform of print, online and events.

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