Eurex

Now, fundamentally speaking, the switch risk has increased only in Buxom futures.

Whereas other Eurex futures still have the CTDs to be dominant, irrespective of yields rising across the curve, right? And I think this is because the notional coupon for Bakhtul is at 4%, whereas for other futures, it's still sitting at 6%.

So in that sense, with 30-year yield hovering around, let's say currently around 390, other bonds in the basket start to compete for the CTD status.

Now, I also see that what is more interesting is that the CTD switch from 54 to 52 will be associated with around 35% change in futures delta.

despite the complexity and risks of over-the-counter trading most transactions are quite standardized with standardized documentation there has been a large push in recent years from governments and financial regulators since the financial crisis of 2007 to 2008 to bring a sizable proportion of the otc markets onto clearing platforms in order to improve overall financial stability and in a later video I'll explain what a clearing house is in the derivatives market and why it might matter.

Exchange traded derivatives are those that are traded via a specialised derivatives exchange such as the CME Group or Eurex.

A derivatives exchange is a market where standardised contracts that have been defined by the exchange are traded.

A derivatives exchange acts as an intermediary to all related transactions and takes margin payments from the customers who trade with them to act as a guarantee.

And this is true with a lot of stock markets in the world, right? The difference between...

how Eurex operates and JPX operates and the US...

Each country has a lot of idiosyncrasies.

And ADRs don't trade the same way in different countries when you have an ADR of the same stock.

Theoptionsinsider.com/pro is the place to go as we go around the horn and see who's joining us on this extra special edition of the European Market Brief.

First, let's go out to the Eurex hot seat, where we are joined by now a third-time offender.

I guess he likes the show.

He is Mr. Rex Jones on the product development team over there at Eurex.

Rex, welcome back to the European Market Brief, sir.

And it's great to be back.

How you doing?

Well, I'm doing well, Mark, and I'm really excited about being here.

Exactly.

But then there's the institutional futures mirror model, and that one is tied directly to the Eurex exchange.

Right.

It's mirroring the FDAC's futures contract.

The past experience from Nestle at the time...

I led 130 factories implementing at that time the OT architectures, DNV, Eurex, all kinds of vessels, airbus, defense, and space.

What I did there is a secret.

And currently leading Iron OT, progressive top class OT security company based here in Czech Republic, also in Slovakia.