BrokerTec Futures Exchange (BTEX)has introduced “inter-market spread credits” for members and users of U.S. Treasury futures products. With the introduction of inter-market spread credits, both members and non-members will enjoy a reduction in their BTEX margin requirements for offsetting, or spread positions in U.S. Treasury futures contracts traded on the Chicago Board of Trade (CBOT). This modification of BTEX margin requirements will lower the cost of trading financiaI futures for the mutual customers of BTEX and the CBOT and allow them to make more efficient use of their capital. These spread savings will reduce current BTEX margin requirements from 40% to 80%.
“This reduction in margin requirements is consistent with the futures industry movement toward a portfolio approach to margining. It also supports the BTEX strategy of providing its customers with the most efficient and cost-effective venue for trading” said Hank Mlynarski, President of BrokerTec Futures Exchange. “This month has seen increased usage of our markets, in particular by institutional end user participants. The adoption of inter-market spread credits will allow us to further build on this positive development,” Mr. Mlynarski added.
Inter-market spread credits are now available for the 5-year, 10-year and 30-year U.S. Treasury futures contracts traded on BTEX against the similar contracts traded on the CBOT. Additional inter-market spread credits may be added in the future.
BTEX implementation is scheduled for October 1st.
In order to further benefit their mutual members and customers, BTEX has requested that the CBOT also amend its margin rules to recognize contracts traded on BTEX for establishing reciprocal inter-market spread credits.
BrokerTec Futures Exchange (BTEX) is a designated contract market approved by the CFTC in June 2001. BTEX offers a low-cost solution for the electronic trading of U.S. fixed income financial futures. BTEX’s open membership includes global financial institutions, futures commission merchants, local trading firms and individuals. The Exchange commenced trading in U.S. Treasury securities futures contracts on November 30, 2001.