Incentives a shot in the arm for Eurex US volume
July 13, 2004 6:26:00 PM ET
(Recasts, updates volume, adds background)
By Ros Krasny
CHICAGO, July 13 (Reuters) - A package of costly measures to boost futures trading has given Eurex US a shot in the arm, with the exchange on Tuesday reporting daily turnover over 50,000 for the first time.
The incentives, ranging from fee waivers through year-end to stipends for market makers, revenue sharing and an offer of Apple Computer iPod music players to certain traders, kicked in on Monday.
"We are pleased about the initial positive response of our customers to our program to further enhance trading activity in U.S. Treasury futures. Liquidity on the screen has been excellent," said Satish Nandapurkar, CEO of Eurex US.
Eurex US -- an arm of German-Swiss Eurex, the world's largest derivatives exchange -- started competing with the Chicago Board of Trade's Treasury contracts in February but has struggled to build momentum.
Tuesday's preliminary turnover was 51,762 contracts, beating the previous record of 40,412 set on Feb. 10.
Volume on Eurex US started to build after the incentive package was announced on June 22, effectively setting up a second launch for the new exchange.
Open interest, or positions open at the end of the trading day, has risen to over 24,000 contracts from a recent low of 17,895 contracts on June 29.
June's average daily volume on Eurex US was less than 0.20 percent of volume in corresponding CBOT Treasury futures. By contrast, Tuesday's volume of 30,481 in Eurex US 10-year Treasuries would be about 6 percent of the CBOT's contract.
The CBOT lowered fees for electronic trading of its Treasury futures in February to head off the challenge from Eurex.
The fee cuts were made for a minimum of six months, and the exchange said its board would review the fee structure at that point. An CBOT spokeswoman could not say whether the topic is on the agenda for the next monthly board meeting on July 20. REUTERS
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