Versatile Trading and Risk Management Vehicle
In the relatively short time in which they have been made available, MAC Swap futures have been broadly embraced by financial institutions as an innovative new method of creating risk exposures that parallel that of OTC IRS instruments. MAC Swap futures offer significant capital efficiencies to the extent that they are eligible for cross-margining offsets vs. other CME Group interest rate products; and, offer reduced margin requirements relative to cleared IRS instruments.
But it is their functionality and application that is paramount to their success. This article discusses how combinations of MAC Swap futures may be deployed effectively to create forward-starting swap exposures.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
