Published On: Thu, Mar 10th, 2011

Eurex KOSPI Product Hits Important Milestone

The Eurex KOSPI Product exceeded 500,000 traded contracts last Friday for the first time since its launch on 30 August 2010. Average daily volume has been increasing steadily, reaching more than 11,000 contracts in March 2011. On 18 January, Eurex achieved a new daily record of more than 64,000 traded contracts.

“Our Eurex KOSPI Product has been very successful since its introduction,” said Michael Peters, Eurex executive board member. “This is due to our close partnership with the Korea Exchange to offer our customers access to the most widely traded index derivative contract in the world. Our participants do not only trade via the order book but also use our block trading functionality, which allows members to place OTC transactions directly and efficiently into the Eurex clearing system.” Currently, block trades of this product can only be executed on Eurex.

“The Eurex KOSPI Product is a linked derivative product that provides more convenient access to KOSPI 200 Options for European customers,” said In-Soo Kim, KRX executive director. “This milestone reflects the high acceptance of the Eurex KOSPI Product as an investment tool for global investors. KRX and Eurex will continue to work closely together with market participants to develop ways to further increase liquidity in the Eurex KOSPI Product.”

Volumes are expected to rise as KRX and Eurex further develop the after-hours market for the world’s most widely traded derivatives contract. Bid-ask spreads for the Eurex KOSPI Product have narrowed considerably, and the number of active end-customers as well as Eurex and KRX members continues to expand rapidly. Currently, there are 11 KRX and Eurex members active in the Eurex KOSPI Product, among them two market makers. There are 12 additional KRX and Eurex members who are preparing to participate in the Eurex/KRX Link.

The Eurex KOSPI Product is a daily futures contract based on the KOSPI 200 options available on the Korea Exchange (KRX). The futures contracts expire at the end of each trading day and any open positions are transferred to KRX to establish a position in the KOPSI 200 option. This product cooperation between Eurex and KRX enables market participants to trade KOSPI 200 options during European and North American trading hours.

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