Exchange-traded derivatives
From MarketsWiki
| This page needs a sponsor. |
| Put your logo here! |
| Email us for information on how to support MarketsWiki. |
Exchange-traded derivatives are listed for trading on public exchanges and consist mostly of options and futures contracts, compared to OTC derivatives like credit-default swaps that are traded privately. The derivatives exchange acts as an intermediary to all transactions and acts as a guarantor, using pooled initial margin from both sides of the trade.
The world's top three derivatives exchanges are the Korea Exchange, Eurex, and CME Group.
The push
U.S. exchange operator NYSE Euronext recently formed an alliance with Dalian Commodity Exchange (DCE) to share information and resources with the aim of expanding their combined global reach.[1] DCE is China's largest futures exchange by trading volume while NYSE Euronext is the world's largest exchange group by market capitalization.
Following the recent global credit crisis, investors are now clamoring for previously OTC derivatives trading to move to regulated public trading spheres to create more transparency in the market.[2] They are demanding that central exchanges and clearinghouses be provided specially to trade products like interest rate swaps that had previously been bought and sold privately through investment banks and other financiers.
References
- ↑ Chinese, U. S. exchanges to jointly develop futures, options markets. Xinhua. Retrieved on November 17, 2008.
- ↑ Wary investors push derivatives to exchanges. Reuters. Retrieved on November 17, 2008.
