CME Group to Launch OIS Futures and Options on Futures
July 29 2008 - 12:55PM
PR Newswire (US)
A new way to hedge interest rate spreads and Fed policy further out
the yield curve CHICAGO, July 29 /PRNewswire-FirstCall/ -- In a
further expansion of its short-term interest rate product
offerings, CME Group, the world's largest and most diverse
derivatives exchange, today announced plans to offer 3-month
Overnight Index Swaps (OIS) futures and options on futures. The
futures contract is scheduled to become available on Sunday,
September 7, 2008, for a trade date of September 8, on the CME
Globex(R) electronic trading platform and on Monday, September 8,
2008, for open outcry trading. The new OIS futures contract will
track the overnight effective Federal Funds rate, a major benchmark
for the U.S. short-term interest rate market. The contract will
reflect the Federal Funds rate compounded over a three-month period
that ends on the contract's expiration date. Because the OIS
futures contract will cover the same time period as a Eurodollar
future, the contract will provide market participants with a direct
and efficient way to trade the spread between 3-month LIBOR and
3-month overnight financing costs. "In the current economic
environment, an increasing number of short-term interest rate
instruments are linked to the overnight Fed Funds rate," said Robin
Ross, managing director, CME Group interest rate products. "Our new
contract will be a welcome means of hedging OIS-linked risk
exposure. Combining the new 3-month OIS contract with our benchmark
Eurodollar futures will enable efficient trading of the Fed
Funds/LIBOR spread, which has grown increasingly volatile, creating
substantial risk for money market participants. The contract will
also provide a direct way to take a view on FOMC policy moves
further out the yield curve than is possible with our existing
30-day Fed Funds contracts." The OIS futures will complement CME
Group's rapidly growing 30-Day Federal Funds contracts, which
reflect the average level of the overnight Federal Funds rate over
a calendar month. CME Group's 30-Day Federal Funds futures and
options have experienced strong growth over the past year. For the
first six months of 2008, the contracts had average daily volume of
115,673 contracts a day, up 52 percent over the same period last
year. For more information on 3-month OIS futures please visit
http://www.cmegroup.com/trading/interest-rates/files/3month_OIS_Contract_Specs.pdf.
CME Group interest rate products span the entire U.S. dollar
denominated yield curve and are among the world's most actively
traded futures and options on futures contracts. They are an
important risk management tool for managing short-, medium- and
long-term interest rate risk with products based on Eurodollars,
U.S. Treasuries, swaps and other dollar-related instruments as well
as products for managing interest rate risk in Europe and Japan. In
2007, an average of 6.9 million interest rate contracts a day
traded at CME Group. CME Group (http://www.cmegroup.com/) is the
world's largest and most diverse derivatives exchange. Formed by
the 2007 merger of the Chicago Mercantile Exchange (CME) and the
Chicago Board of Trade (CBOT), CME Group serves the risk management
needs of customers around the globe. As an international
marketplace, CME Group brings buyers and sellers together on the
CME Globex electronic trading platform and on its trading floors.
CME Group offers the widest range of benchmark products available
across all major asset classes, including futures and options based
on interest rates, equity indexes, foreign exchange, agricultural
commodities, and alternative investment products such as weather
and real estate. CME Group is traded NASDAQ under the symbol "CME".
The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex
and E-mini, are trademarks of Chicago Mercantile Exchange Inc. CBOT
and Chicago Board of Trade are trademarks of the Board of Trade of
the City of Chicago. All other trademarks are the property of their
respective owners. Further information about CME Group and its
products can be found at http://www.cmegroup.com/. CME-G
DATASOURCE: CME Group CONTACT: Media, Pamela Plehn,
+1-312-930-3446, or Allan Schoenberg, +1-312-930-8189, , or
Investors, John Peschier, +1-312-930-8491, all of CME Group Web
site: http://www.cme.com/
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