Using Treasury Futures to Replace Swap Exposure

  • 22 Aug 2013
  • By Joseph Shatz

An Attractive Option Due to Dodd-Frank

Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) has introduced major legal, operational, and regulatory challenges associated with continuing to trade swaps. With the second phase of the Commodity Futures Trading Commission's (CFTC's) implementation of Title VII of Dodd-Frank with regards to swaps clearing just having ensnared the next round of market participants (Category 2) as of June 10, 2013, we examine how investors could use Treasury note futures contracts to replace over-the-counter interest rate swap (OTC IRS) positions while achieving a similar interest rate risk exposure.

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Disclaimer: This information was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.