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Eurex | Eurex Clearing
For us at Eurex, MSCI is a major strategic focus point. That is why we constantly explore market developments and continuously expand our MSCI offering. To research MSCI exchange-traded derivatives (ETDs) in today’s market structure, we teamed up with AITE Group. In the second part of the three-piece study, the importance of margin cost in choosing an exchange is outlined.
Part 2: Margin cost: a driver of exchange choice
One of the most important factors in choosing an exchange centers on margining efficiency. While liquidity and ease of execution are also critical to exchange choice, capital efficiency is of key interest in the present environment. Market participants who trade client portfolios across multiple ETDs, for example, note that a portfolio-based margin system, such as Prisma, is the optimal choice given its netting benefits.
The following paragraphs provide insight into Eurex’ cross-margining system to highlight the importance of model impact. Portfolio-based risk management provides greater capital efficiencies to investors trading ETDs. Clients may realize substantial savings, as shown in the following examples, due to risk netting effects for listed positions as well as positions between listed and OTC instruments.
Please find the first and the second part of the study below.