MAY 2019 - CURVEGLOBAL NEWSLETTER
CURVE POINTS | MAY 2019 ![]() Hi All, When we started CurveGlobal it was with a different mindset. We looked at FX markets, cash equity markets and OTC swap markets, and knew that competition had brought significant advantages to the users of those markets. For example, tighter spreads, lower transaction fees, but most importantly lots of different ways of trading. Ways of trading that suited your size of position, time of trade or execution risk appetite. But could it work in futures markets? Could we make changes, with some look-a-like products and some new innovative ones? Could we offer greater competition by developing different ways to trade? Did the market want competition or a replacement? For sure, competition brings many obvious benefits but it can also fragment liquidity. Adaptive Pricing Competition benefits the market At CurveGlobal, we believe that futures markets globally benefit from competition – offering more ways of trading, different fees, tick increments and data costs. We think the example in Europe playing out in real-time is proving this. We see the benefits far outweighing any fragmentation of liquidity, and it seems that a growing number of buy-side and sell-side firms share our view. Growth drivers Our absolute belief, however, is that this couldn’t work without us being able to clear and portfolio margin at LCH, as those who take the positions are able to hedge the risk elements across related products (and benefit from margin savings). This is a partner that also believes in open access and listening to its customers. Talk to us Best, ![]() CurveGlobal® One month SONIA Futures We announced this week that we will soon be expanding our range of SONIA interest rate futures, with the launch of CurveGlobal® One month SONIA Futures on 29 July. Designed to complement existing CurveGlobal® Three month SONIA Futures, this is another example of how CurveGlobal is delivering greater choice and innovation to the market. Trade ConceptBlock Trades and Adaptive PricingBy Ian Murphy For this month’s Trade Concept we look at the growth in block trades in CurveGlobal STIR Futures and the use of Adaptive Pricing. Block Trades This volume was split across our three STIR products: Sterling, Euribor and SONIA. Adaptive Pricing, fractional pricing using block trades, made up 65% of all block trades during the last month. Block Volume Growth ![]() Adaptive Pricing Participants create Adaptive Pricing by using block trades to create a fractional price for the whole trade. ![]() The example above shows details for a single contract maturity trade. The Adaptive Pricing can also be applied to strategy trades to create fractional pricing:
Benefits of Adaptive Priced Block Trades in CurveGlobal products:
Monthly Volumes and Open Interest![]() Team PicksRead the team’s top picks for something to do on a lazy Sunday afternoon... Feeling peckish? Must see Top reads The Challenger Sale: How To Take Control of the Customer Conversation, by Matthew Dixon and Brent Adamson, argues that relationship-building is no longer the best sales method. It explores how customers are changing the way they buy, so sales people must change how they sell. A must-read from Andy. Press Articles of Note (subscription content)CURVEGLOBAL TO EXPAND RANGE OF SONIA INTEREST RATE FUTURES WITH LAUNCH OF CURVEGLOBAL® ONE MONTH SONIA FUTURES ON 29 JULY REGULATORS CUT BANKS SOME SLACK ON SHIFT AWAY FROM LIBOR NO MORE DELAYS ON MIFID OPEN ACCESS, EU REGULATOR SAYS LIBOR PHASE-OUT STILL LEAVES NEW DEALS AT RISK, MOODY'S SAYS LCH BASIS SWAP TEMPLATES MAY AID LIBOR CONVERSION Come Visit UsFIA // IDX 2019 To find out more about CurveGlobal or to offer suggestions on improving this newsletter, contact us at +44 20 7797 1055 or info@curveglobal.com. |