Eurex launches world's first MSCI Korea futures contract

Frankfurt-based Eurex launched on Monday a US Dollar-denominated future based on the MSCI Net Total Return index.

Ralf Huesmann, heading product design for MSCI Derivatives at Eurex, said: “As global leader in MSCI derivatives we now added a last major piece in the puzzle of our MSCI offering with the goal to cover all Developed and Emerging Markets globally.”

Eurex competes with Intercontinental Exchange and Hong Kong Exchanges and Clearing in MSCI futures and options.

Huesmann said of the new contract: “This allows global investors to trade all these markets with the same index methodology, similar contract specifications and bundled in one clearing house to be highly margin efficient.”

The launch is the latest twist in the termination of an agreement, made in 2010, between Deutsche Boerse-owned Eurex and Korea Exchange that allowed the European venue to trade Korean equity and currency contracts.

Robbert Booij, the chief executive officer of Eurex Frankfurt AG, said in February the German exchange and Korea Exchange had agreed to decommission the Eurex/ KRX link on June 5.

The termination was linked to the Seoul-based group’s plan to extend on Monday June 9 its derivatives trading day by twelve hours from 1800 to 0600 Korean time.

The extension meant Korea Exchange (KRX), which offers foreign exchange, equity and interest rate futures, and equity options, is open until 1700 New York time, capturing the European and US trading days.

The change is consistent with an announcement by KRX in April when the Asian exchange said the extension is designed “to enhance global competitiveness and improve trading convenience for market participants”.

Booij said last month: “Eurex wishes our long-standing partner, KRX, every success in extending their trading hours and allowing direct access to their products across time zones.”

Eurex’s KOSPI 200 options traded 17.6 million lots last year, according to FOW Data, while the KOSPI 200 weekly options traded 14.8 million contracts.

Eurex daily futures on KOSPI 200 weekly options traded 14.6 million lots while the KOSPI 200 daily futures traded 4.3 million lots and the USD/KRW daily future traded 1.9 million contracts, according to FOW Data.