Derivatives marketplace CME Group and Nasdaq (Nasdaq: NDAQ) have announced a ten-year extension of CME Group’s exclusive license to offer futures and options on futures based on the Nasdaq-100 and other Nasdaq indexes, through 2029.
Terry Duffy, CME Group
We are extremely pleased to extend our exclusive licensing agreement with Nasdaq, said CME Group Chairman and Chief Executive Officer Terry Duffy. “Building on more than 20 years of partnership, this agreement will ensure market participants worldwide will continue to have seamless access to our suite of Nasdaq products, allowing them to manage risk or gain exposure to the 100 largest non-financial companies. Customers also benefit from capital efficiencies by trading alongside our industry-leading equity index products.
Adena Friedman
CEO of Nasdaq
The Nasdaq-100 has been a top performing large cap growth index over the last ten years and has been providing investors with access to the world’s most innovative companies, including Amazon, Apple, Facebook, Alphabet, Intel, Microsoft, and Starbucks among many others,” added Adena Friedman, President and CEO of Nasdaq. “We have been partners with CME Group for more than 20 years and extending our relationship enables market participants access to our global benchmark products in order to manage their equity market risk.
In 1982, CME Group pioneered futures trading on equity indices. The company partnered with Nasdaq to launch Nasdaq-100 futures in 1996 and the E-mini Nasdaq-100 futures contract in 1999, which is now one of the most actively traded equity index futures contracts in the world. The extension was agreed upon under mutually-beneficial terms, which were not disclosed, that will allow for expanded collaboration and innovation as CME and Nasdaq continue a commitment to their customers and to the marketplace.
Overall, the Nasdaq-100 futures and options on futures suite trades an average daily volume of more than 437,000 contracts- an increase of 52 percent year to date. Additionally, average daily volume for quarterly, monthly and weekly Nasdaq-100 options has nearly tripled during the past five years to more than 11,000 contracts in 2018.
The extended licensing agreement covers Nasdaq-100 futures and options, Nasdaq Biotechnology and Nasdaq Composite indexes, as well as other indexes that complement market participants’ U.S. index trading strategies. This extension will allow both CME and Nasdaq to continue to innovate as partners within the equity index marketplace and deliver customer-focused risk management tools such as the Basis Trade at Index Close (BTIC) functionality on Nasdaq-100 futures, which enables market participants to execute a basis trade relative to the official close for the underlying index for more efficient cash management.