Leading data and analysis provider FTSE Russell is collaborating with International derivatives exchange Eurex for the launch of equity index futures and options.

According to the terms of the partnership, Eurex will use FTSE Russell’s indexes to launch a wide range of global and UK equity index future and options contracts. This will start with the rollout of four FTSE 100 index-based futures later this month. The contract on FTSE will enable Eurex to extend its new Total Return Futures (TRF) segment.

The derivatives arm of Deutsche Börse Group will also enable the company to expand its partnership with top index providers. The new launch shows the gradual shift towards regulated on-exchange trading with passive investments and central clearing.

Also, the exchange will be able to meet the demands of many clients especially for TRF contracts in the UK equity market.

New TRF to complement existing TRF suite

Eurex stated that there is an increased demand for risk management products, and the exchange has strong commitments to providing support to clients via innovative solutions.

The TRF contract will also complement Eurex’s existing TRF suite, including equity basket TRFs, individual Equity TRFs, and further index TRFs.

Eurex rolled out the TRF segment 5 years ago when it listed the first Total Return Futures on EURO STOXX 50 Index. In October, the exchange updated its offerings by adding new basket trade functionality and Equity Return Futures on 255 stocks.

Now, there are over 50% of the EURO STOXX 50 OTC migrated to Eurex since it was launched. In the official announcement, Eurex stated that the open interest presently stands at 1.5 million contracts.

Meeting the needs of clients

Eurex has reported a growth in OTC Clearing in its recently released financial numbers for 2020. However, there was a slump in performance when it comes to European equity derivatives contracts.

Michael Peters, chief executive officer of Eurex, commented on the partnership and said the company is excited about the deal. We are pleased to partner with FTSE Russell to further expand this novel area in particular,” he stated.

OTC segments in futurized listed derivatives include demand for electronic execution, capital requirements, as well as increased margin pressure. But the goal is to use the pioneering TRF to provides solutions in these areas. The partnership shows that Eurex is strongly committed to provide support for clients and offer solutions that meet their needs, Peters added.