Swaps meet
CME's electronic swaps-trading platform, Swapstream, recently provided interest rate swaps (IRS) traders a second platform option – a new dealer-to-client swaps trading program called sPro. The new platform serves sophisticated professionals with a wider range of products and price-streaming plus more efficient execution.
This is the second major upgrade in Swapstream services. In January, Swapstream re-branded its sDealer third generation trading platform, which allows customers to trade the Euro Overnight Index Average (Eonia). The new sDealer now also offers “click-and- trade” in addition to “click-and-accept” protocols. In addition, Swapstream has launched new IRS products denominated in U.S. dollars and British pounds.
Swapstream, a wholly-owned subsidiary of CME, is an overthe- counter platform that offers central clearing services from CME. In 2006, the global IRS market surpassed $207 trillion.
www.cme.com/spro
Rock around the clock
Can't sleep at night? Try trading
commodity futures electronically
during the wee hours.
On June 4, CME made it possible – for the first time – to trade these products virtually around the clock between 9:05 a.m. Monday and 1:30 p.m. CST Friday on the CME Globex platform. Trading takes a daily break between 4:00 p.m. and 5:00 p.m. Contracts now available for extended trading hours include pork bellies, lean hogs, live cattle, cash-settled butter, dry whey and fertilizer.
The change addresses increased interest from new customer groups, such as hedge funds, for expanded access to these highly volatile product groups.
The expansion “will enable our customers around the world to access our markets at times that work best for their schedules and their individual portfolio management strategies,” says Terry Duffy, CME executive chairman. Electronic trading now accounts for 10 percent of total daily CME commodities volume.
Powerful partnership
CME will soon launch contracts
based on the world's foremost
index of investment-grade
fixed-income assets, giving fixed
income portfolio managers a
powerful new way to
manage risk.
CME Lehman Brothers U.S. Aggregate Index futures will be linked to the Lehman Brothers U.S. Aggregate Index of corporate debt developed by investment bank Lehman Brothers. Institutional investors, including 90 percent of the U.S. market, use the index to measure the performance of their fixed-income portfolios.
Craig Donohue, CME chief executive officer, called the introduction of CME Lehman Brothers U.S. Aggregate Index contracts “a significant step forward in bringing CME into the $27.4 trillion U.S. bond market.”
The index, launched in 1986, covers six asset classes and more than 8,600 investment-grade, taxable securities denominated in U.S. dollars. Lehman estimates that approximately $2 trillion in global assets are benchmarked to the index.
Whey to go!
A popular high-protein, low-fat agricultural
product recently made its exclusive
trading debut on the CME Globex
electronic platform.
Dry whey is a by-product of cheese manufacturing that's commonly found in breads, cereals and feeds. It's also a popular ingredient of the high-energy, high-protein snacks and drinks whose consumption has grown rapidly in recent years.
Consequently, dry whey has become a volatile commodity due to frequent supply-demand imbalances. The new contracts offer future price protection and hedging opportunities as well as a mechanism for price discovery.
CME Dry Whey contracts are 44,000 pounds each and have a tick value of $11. They are traded on CME Globex from 9:40 a.m. to 1:10 p.m. CST.
Finnish line
CME will shortly wrap up another electronic trading first with wood pulp futures and options contracts.
Based on the PIX NBSKP Europe Index developed by Finland-based FOEX Indexes Ltd., the new 20-tonne, $10-tick contracts will start trading in the third quarter of this year.
The new contracts will give the OTC wood-pulp trading market a transparent, all-electronic marketplace for hedging and other trading opportunities without counterparty risk. The contract will trade daily on CME Globex from 5:00 p.m. Sunday until 4:00 p.m. Friday CST with a one-hour pause each trading day.
Tokyo connection
CME Euroyen futures and options
based on the Tokyo Interbank Offered
Rate (TIBOR) have hit the electronic
trading circuits.
They are now offered on CME Globex side-by-side with open outcry contracts, along with functionality that enables Euroyen TIBOR traders to trade implied spreads, complex options combinations and cross margining with other CME-cleared interest rate products. The electronic venue also allows customers to trade yen-based interest rates across multiple time zones.
CME total interest rate product volume averaged a record 4.2 million contracts in the first quarter of 2007, up 34 percent from the same period a year ago.
