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The brokerage house X-Trade Brokers, an official WSE partner on the derivatives market, is a EUR/PLN and US$/PLN contracts market maker as of Monday, 26 November.
The appointment of XTB as market maker and the search for other market makers combined with an educational campaign and frequent training provided free of charge to investors throughout Poland help to increase interest in these instruments. The WSE may shortly introduce to trading new categories of currency futures contracts including GBP/PLN and CHF/PLN contracts.
The volume of trading in currency contracts has grown significantly since early November due to the elimination of fees charged by the WSE and the National Depository for Securities for trading in currency futures contracts, additionally boosted by the operation of the market maker XTB as of 26 November.
The average monthly volume of trading between January and October 2007 was 287 contracts. The volume reached 111 contracts at a single session on 27 November alone (more than in the month of February 2007). The volume of trading has been 991 contracts month to date in November (including today’s session by 14:17).
The number of open positions in currency contracts has been growing since September 2007, demonstrating that investors’ interest in the market has been spiked.
XTB: Currency Futures Contract Market Maker
A market maker is a brokerage house which places buy and sell offers on both sides of the order book to ensure market liquidity and depth, eliminating problems with closing positions in the market. The WSE first listed currency contracts in 1999; its co-operation with XTB with its focus on the currency market creates an opportunity to boost investor interest in currency futures.
XTB as market maker follows the following principles:- for 80% of the duration of a trading session, the spread (the difference between the lowest limit price in a sell order and the highest price limit in a buy order) for the two nearest expiry dates of US$/PLN and EUR/PLN contracts shall be:
- PLN 0.60 (60 pips);
- for two subsequent expiry dates – PLN 0.90 (90 pips);
- 50 contracts of each series, for each side of the market;
- for 20% of the duration of a trading session, the spread of buy and sell offers may be:
- for the two nearest expiry dates – PLN 1.20;
- for two subsequent expiry dates – PLN 1.80;
- at least 25 contracts of each series.
“We hope to help the WSE improve trading statistics in the market,” said Jakub Zab?ocki, President of X-Trade Brokers, “and to meet the expectations of our investors interested in the stock market. We plan to provide the complete exchange market offer by January 2008. We are starting with currency contracts market making because the currency market is what we have focused on over the past 5 years.”
