A basis trade is the purchase of a bond and simultaneous sale of a futures contract. This strategy often used in professional trading is aimed at exploiting the price differences between bonds while simultaneously hedging the market risk. Eurex indicated that there is a considerable demand for additional instruments - the so-called interim maturities - and also for trading in these products on the OTC market (over the counter), which is not just limited to the deliverable bonds in Eurex futures. Liquidity in the new products will be assured, as usual, by market makers, Eurex said. There are currently a total of 22 participants active on the Eurex Bonds platform; several new participants are in the connection process.
Eurex Bonds offers trading and clearing in German government bonds as well as issues of the KfW (Kreditanstalt für Wiederaufbau), the European Investment Bank, individual German states and Jumbo Pfandbriefe. Moreover, with the basis-trade facility, Eurex Bonds provides an attractive product combination of bonds and futures contracts traded at Eurex.
