Frankfurt, Germany â September 18, 2002 â Eurex is further expanding its portfolio of index derivatives with a total of nine new futures and options on sector indices of Euro STOXX and STOXX 600. As of September 23rd, Eurex is launching futures and options on the sectors Financial Services, Media and Utilities of the Euro STOXX index, as well as options on the STOXX 600 sector indices Banks, Technology and Telecommunications. The portfolio of STOXX derivatives will then comprise 28 products. For the existing futures on the STOXX 50 index, Eurex wants to introduce so-called Designated Market Making as of October 1st. This is intended to make the spreads even narrower and trading in the products even more attractive. For the options on STOXX 50, the market-making model for option products at Eurex will continue to apply, with market makers who enter binding quotes in the order book.
The index and sector-index products made available by Eurex are intelligent risk management instruments designed to fine-tune the risk in portfolios and thus provide for maximum added value to its customers, Eurex said. The high demand from market participants for sector-index products stems from the increasing use of trading strategies that are focused on individual sectors, as the exchange explained. This trend is underscored by active OTC (over-the-counter) trading in sector-index products, it said.
The Eurex derivatives market has traded 2.4 million contracts in futures and options on the STOXX sector indices so far this year, representing an almost 30-fold increase compared with the same period of last year. The derivatives exchange had launched the first eight futures contracts on sector indices of the Dow Jones STOXX 600 and Dow Jones Euro STOXX in March 2001. In September 2001, they were followed by four option contracts on the sector indices Banks, Technology, Telecommunications and Healthcare of the Dow Jones Euro STOXX.
Eurex offered the first European index derivatives in 1998 when it launched futures and options on DJ STOXX 50 and Euro STOXX 50. In the meantime, the STOXX family has become the European benchmark, with some 600,000 contracts being traded in these products on the Eurex platform per day.
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