16 Nov 2023

Eurex | Eurex Clearing

Key takeaways from the report “Navigating Markets: Exploring the FTSE product suite”

Our recent report explores our FTSE derivatives suite in collaboration with FTSE Russell. It delves into the intensive effort behind futurizing total return swaps, the inception of the FTSE 100 index, the development of digital asset derivatives and more. Below, you’ll find our key takeaways from the report.

1. Post-crisis financial reforms drive firms to seek listed alternatives to OTC products.

The costs and complexities of trading in the OTC markets increased with the introduction of new rules, such as the Uncleared Margin Rules (UMR). This accelerated a trend towards “futurization” of OTC markets that was already well underway. 

2. Transitioning to listed products did not only simplify and optimize margin.

Introducing new products, such as total return futures (TRF), brought margin and trading efficiencies and lowered counterparty risk. In addition, it brought new firms to the market that typically don’t trade in OTC markets. 

3. The buy side expanded its TRF usage to include additional strategies as an alternative to OTC markets.

The EURO STOXX 50® total return futures have gained popularity as a beta replacement tool that can be traded instead of price return futures. There has also been a migration by firms that previously traded calendar spreads to capture repo parameters. They were attracted by the opportunity to capture the same returns in a listed environment. 

4. Bringing more trading on the same listed market can significantly increase capital efficiency.

The benefits of netting across positions can be underappreciated by the buy side. For firms trading across European exposures, from EURO STOXX 50® to FTSE 100, trading all positions on one market can bring operational and capital efficiencies.  

5. Eurex is Europe’s preeminent trading hub for index derivatives. 

Eurex not only offers a full range of exposures to the region but also ensures those product suites reflect the rapidly changing and fluid nature of modern derivatives markets. Product development in conjunction with index providers, such as FTSE Russell, also provided members with cutting-edge market access reflecting new liquidity pools – such as the recently launched Bitcoin Options listed derivatives. 


Learn from our in-house experts, and industry leaders from Goldman Sachs, BNP Paribas, Citi, and Flow Traders and stay informed about the latest trends and insights in the financial industry. Click here to read the full report. 

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