SFE Bond Index Futures (BX) contract provides market participants with a range of trading opportunities including; management of corporate sector credit exposure, duration management, asset allocation, arbitrage and spread trading with existing SFE Interest Rate Products.
SFE Bond Index Futures (BX) are based on the AFMA Fixed Interest Adjusted Accumulation (Capital) Index which offers:
- Independent pricing - with 11 price providers contributing electronically to price individual securities in the Index,
- 99% correlation with the composite bond index benchmark
- Broad distribution - daily settlement price & intra-day updates to Index values are published on Reuters and Bloomberg,
- Transparent methodology and criteria for inclusion of constituents,
As well as being able to trade the contract on the central SYCOM® market, market participants can use a range of “off-market” trading mechanisms to address specific needs.
The Off-Market trading mechanisms available for SFE Bond Index Futures (BX) are:
- Pre-Negotiation - this allows Participants to ‘withhold’ or ‘pre-negotiate’ (according to specific pre-negotiation rules) before bringing business to SFE for execution on the trading platform. Market users can benefit from being able to execute orders with greater flexibility when discussing, arranging and transacting Bond Index Futures (BX).
- Block Trade Facility (BTF) – using the BTF can minimise the price impact and time delays that may occur when large orders (200 contracts or over for BX) are transacted in the central market. Note that use of the BTF is prohibited within five days of expiry of the spot quarterly contract.
- Exchange for Physical Facility (EFP) – enables market participants to privately negotiate (outside the central market) to swap an SFE Bond Index Futures (BX) position for the equivalent notional value of physical securities position at a price negotiated between counterparties. EFP’s provide the flexibility and certainty of an over-the-counter (OTC) market with the counterparty guarantee of an exchange market.
Information relating to procedures for all “Off-Market” transactions is available on the SFE website.
Further information:
Further information on the Bond Index Futures (BX) is available at the following link, please click to view:
