Announced today from Eurex Exchange (a subsidiary of Deutsche Börse Group), the exchange revealed a successful launch for it’s Euro Bund options with weekly expiration dates. The new instrument launch for the international derivatives market took place in April 2015 and has been met with considerable demand. The average daily traded volume since launch has reached more than 8,000 contracts. Open interest peaked above 61,000 contracts.
Eleven market makers made a significant contribution to liquidity creation. The proportion of weekly options in the volume of Euro Bund options with longer maturities is currently over three percent.
“We are very pleased with the observed level of market interest. The progress of volumes proves our strategy of developing derivatives in cooperation with market participants to facilitate risk management of portfolios and positions,” said Eurex Executive Board member Mehtap Dinc.
The new weekly options are offered with expiration dates on the five following Fridays. They have similar product specifications to the existing Bund options: the contracts will be physically settled, denominated in euros with a minimum price change of one tick (= 10 euros). Trading hours will be from 8 a.m. to 5.15 p.m. CET.
A Bund is a bond issued by the German federal government. The Eurex Euro-Bund futures contract from which the options are based on is the exchange’s most popular contract, with total volume in 2011 of 236 million contracts. It is based on long-term debt with a term of 8.5 to 10.5 years, and is considered the benchmark for long-term euro-denominated government debt.
Euro Bund Details, Courtesy of MarketsWiki
To read more about Eurex’s Weekly Euro Bund, click here.