Citi Clears CDS Index Option Trades Through ICE Clear Credit
February 17 2021 - 8:30AM
Business Wire
Options activity builds on record year at ICE
Clear Credit in 2020
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator
of global exchanges and clearing houses and provider of mortgage
technology, data and listings services, today announced that Citi
has traded and cleared the first client-executed Credit Default
Swap (CDS) Index Option trades in the U.S. through ICE Clear
Credit.
“We’re excited to work with ICE Clear Credit as they introduce
and build an innovative solution for clearing of CDS Index
Options,” said Mariam Rafi, Americas Head of OTC Clearing and FXPB
at Citi. “With portfolio margining opportunities across Single
Name, Index and Option instruments, this is an important step that
will help drive capital efficiencies and improve risk management
for all market participants.”
ICE Clear Credit launched clearing services for CDS Index
Options in late 2020. It currently offers clearing of Index Options
on the CDX North American Investment Grade and High Yield Index
underlyings. Options on iTraxx Index instruments are expected to be
added in 2021.
"ICE Clear Credit's new clearing services, designed in close
collaboration with the trading community, deliver market evolution
and effective execution and risk management tools," said Samuel
Page Head of North American Macro Credit and IG CDS Trading at
Citi. "We expect this will help lead to increased adoption of CDS
Index Options by end-users and overall elevated trading activity
and market depth."
“During the last year, we saw tremendous momentum across our CDS
complex as customers accessed our services to execute macro
strategies and manage risk during times of unprecedented market
volatility,” said Stan Ivanov, President of ICE Clear Credit. “Our
CDS Index Options clearing services, based on a robust and capital
efficient portfolio risk management approach, will help bring
additional standardization, transparency and depth to the CDS
market.”
ICE Clear Credit’s Index Options solution provides a number of
innovations including portfolio margining and a common
exercise-and-assignment platform where all market participants,
dealers and buy-side firms, can perform time-critical decision
making in a centralized, risk-managed and technologically advanced
fashion.
ICE Clear Credit recorded its best year in 2020, in terms of
both dealer and client volumes. It cleared over $30 trillion in
combined client/dealer notional amount, with 78% originating from
client-related transactions. ICE Clear Credit also set a new record
in March for both the highest ever monthly combined client/dealer
Index volume at $6.8 trillion notional amount, and the highest ever
monthly client Index volume at $2.9 trillion notional amount, in
both cases more than doubling the previous monthly volume.
Launched in 2009, ICE Clear Credit and ICE Clear Europe CDS
clearing solutions offer clearing for more than 500 Single Name and
Index CDS instruments based on corporate and sovereign debt and
have reduced counterparty risk exposure by clearing over $283
trillion in two-sided notional amount, with combined open interest
of approximately $2.0 trillion.
For more information about ICE Clear Credit, please visit:
https://www.theice.com/credit-derivatives/options.
About Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE) is a Fortune 500 company
and provider of marketplace infrastructure, data services and
technology solutions to a broad range of customers including
financial institutions, corporations and government entities. We
operate regulated marketplaces, including the New York Stock
Exchange, for the listing, trading and clearing of a broad array of
derivatives contracts and financial securities across major asset
classes. Our comprehensive data services offering supports the
trading, investment, risk management and connectivity needs of
customers around the world and across asset classes. As a leading
technology provider for the U.S. residential mortgage industry, ICE
Mortgage Technology provides the technology and infrastructure to
transform and digitize U.S. residential mortgages, from application
and loan origination through to final settlement.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual
property rights of Intercontinental Exchange, Inc. and/or its
affiliates is located here. Key Information Documents for certain
products covered by the EU Packaged Retail and Insurance-based
Investment Products Regulation can be accessed on the relevant
exchange website under the heading “Key Information Documents
(KIDS).”
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 -- Statements in this press release regarding
ICE's business that are not historical facts are "forward-looking
statements" that involve risks and uncertainties. For a discussion
of additional risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see ICE's Securities and Exchange Commission (SEC)
filings, including, but not limited to, the risk factors in ICE's
Annual Report on Form 10-K for the year ended December 31, 2020, as
filed with the SEC on February 4, 2021.
ICE-CORP
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version on businesswire.com: https://www.businesswire.com/news/home/20210217005322/en/
ICE Media Contact: Damon Leavell Damon.Leavell@theice.com
212-323-8587 ICE Investor Contact: Warren Gardiner
Warren.Gardiner@theice.com 770-835-0114
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