SGX Clears First AsiaClear Iron Ore Futures Trades
As market leader for iron ore derivatives, SGX has been working closely with global market participants operating under different regulatory regimes to introduce products that meet their iron ore risk management needs and those of their clients.
The SGX AsiaClear Iron Ore Futures contract is fully fungible with the SGX Iron Ore Swap contract. Customers with offsetting positions in swap and futures will enjoy margin offset. This multi-instrument model limits any fragmentation of liquidity for the iron ore derivatives market.
In addition to swap and futures contracts, the SGX AsiaClear Iron Ore Option contracts introduced in September 2012 have also received strong support from market participants. Close to 10,000 lots (4.98 million mt) of SGX Iron Ore Option contracts were cleared in 2013 so far, accounting for more than 75% of the global market. Open interest also reached a high of 9,154 lots (4.6 million mt) on 24 April 2013, representing 54% of the global market. This attests to SGX being the main clearing venue for iron ore derivatives.
Customers who clear iron ore futures, swap and option positions in the same clearing account with an SGX Clearing Member also enjoy portfolio margin savings.