Eurex: Trading Initiative For DJ STOXX 50 Products

In early October, Eurex, the international derivatives market, launched an initiative to boost trading activity in futures and options on the DJ STOXX 50 index further. Since that time, so-called Designated Market Making has applied to the futures, which provides for even narrower spreads and thus for further increases in trading activity. For the options on STOXX 50, the existing market-making model for options products at Eurex continues to apply, in which the market makers provide for liquidity in the order book. A fee waiver applies for both products up to and including December 2002.

The new initiative is already having a positive effect, Eurex said. Since October, open interest in the futures contract on the STOXX 50 has increased from 41,000 contracts to more than 47,000 contracts by about 15 percent. In business year 2002, some 550,000 contracts have been traded in futures and options on the STOXX 50 index at Eurex to date, a 57 percent increase in volume as compared with 350,000 contracts traded in these products during the same period of last year. Moreover, as a result of the Designated Market Maker activities, the difference between the bid and ask prices quoted in the order book has narrowed significantly, as Eurex pointed out.

Eurex has been offering futures and options on the STOXX 50 and Euro STOXX 50 indices since 1998; it was the first exchange to offer European index derivatives. In the meantime, Eurex has expanded the STOXX index family to include 28 sector products and has developed it into the European benchmark. The products in the STOXX index family now make a major contribution to the success at Eurex.