EDX, London’s Russian IOB Equity Derivatives service has attracted $17.2 billion worth of trading since its launch a year ago.
The service was launched in December 2006 to offer trading in index derivatives based on the FTSE Russia IOB Index, which measures the performance of the ten biggest and most liquid Global Depositary Receipts (GDRs) issued by Russian companies on the London Stock Exchange and traded on the International Order Book.
In addition to exchange-traded contracts on the index itself, the service offers order book trading in single stock options and futures on five of the most liquid index constituent companies, with dedicated liquidity provision from 3 market makers.
Bilaterally negotiated derivatives trades on an additional 20 Russian and 7 Kazakh GDRs can be reported to the service to benefit from exchange and clearing processes and efficiencies.
Over 4.6 million stock contracts and 30,566 index contracts have been traded on the service since its launch, equivalent to an average month-on-month growth in contracts traded of 65%. July and August were the two busiest months for the service, when the number of contracts traded per day averaged at 41,101.
The single busiest day’s trading was 25 September when 173,540 contracts were traded with a notional value of $179.7 million.
November was a record month in terms of notional value, with a total $3.3 billion traded through the service. The average notional value traded per month from launch to the end of November was $1.4 billion, and the average number of contracts traded per month was 389,122.
“The Russian IOB service has got off to an excellent start, and is clearly meeting demand in the marketplace for exchange-traded derivatives. Twenty member firms are now using the service, and that number continues to expand with firms taking EDX membership specifically to use the Russian derivatives service. We’re looking forward to seeing the service grow and mature in what looks set to be an exciting year for EDX,” says Lee Betsill, EDX London.
“EDX’s Russian derivatives service has really opened up access to the Russian derivatives market by giving exposure to Russia without the complexities associated with trading in the domestic market. It has also boosted the market’s quality. The pricing which we have provided to EDX’s screen-based service has improved transparency, providing a benchmark for pricing in the OTC options market, resulting in a contraction in bid-offer spreads that has helped to drive the increase in trading volumes.”
“We are pleased to have come from a position where, having not previously been active in Russian derivatives, we are now one of the largest participants in Russian derivatives trading on EDX,” adds John Keogh, managing director, SIG.