CME Rival ELX To List Ultra Long Bond Futures On Jan. 11
December 22 2009 - 3:22PM
Dow Jones News
Start-up exchange ELX Futures LP plans to introduce a new
long-term Treasury futures contract on the same date that rival CME
Group Inc. (CME) intends to launch an identical interest rate
product.
ELX expects to list ultra long-term U.S. Treasury bond futures
on Jan. 11, hoping to steal the thunder from CME's ultra Treasury
bond futures, which start up that same day.
Both exchanges hope to profit from investors' desire to use
longer-duration instruments to hedge their positions.
Exchange leaders believe there is increased demand for Treasury
products as the government significantly boosts the amount of debt
it sells to finance deficit spending.
Like with CME, ELX's ultra bond contract will allow the delivery
of Treasury securities with maturities of 25 years and up. The
traditional 30-year Treasury bond contract will permit delivery of
securities with maturities of 15 years or more.
CME officials were not immediately available for comment.
ELX announced in October that it is crafting Eurodollar futures
and options meant to mirror CME's benchmark interest rate product.
No launch date has been announced yet for ELX Eurodollar
futures.
ELX also goes head-to-head with CME on futures tied to two- ,
five- , and 10-year Treasury notes, in addition to the 30-year
Treasury bond.
The all-electronic exchange went online in July. During the
first six months, it has attracted approximately 3% market share,
which is better than many market watchers had expected. However,
trading interest among major future brokers remains somewhat
muted.
A consortium of banks, trading firms and technology companies
provided the financial backing for the new exchange, claiming it
offers a cheaper trading alternative to CME, which is the world's
largest futures exchange.
-By Howard Packowitz, Dow Jones Newswires; 312-750-4132;
howard.packowitz@dowjones.com
(Jacob Bunge contributed to this report.)
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