Intercontinental Exchange Hits Milestone in €STR Futures Trading

Intercontinental Exchange Celebrates €STR Futures Success

LONDON--Intercontinental Exchange, Inc. (NYSE:ICE), a prominent global provider of technology and data solutions, has achieved a significant milestone with its €uro Short Term Rate (€STR) futures. These futures recently surpassed an open interest of 500,000 contracts, reflecting the growing popularity and trust in ICE's offerings.

Growing Open Interest in €STR Futures

ICE’s€STR futures have seen a remarkable rise in open interest, which now stands alongside 16.2 million lots in Euribor. This demonstrates the increasing importance of these contracts in managing euro-related interest rate risks. Interestingly, the open interest across ICE’s overall interest rate complex climbed 14% year-over-year, reaching over 25 million contracts.

Record Average Daily Volumes

In addition to growth in open interest, the average daily volume (ADV) for ICE's interest rate portfolio was reported to be up 55% year-over-year at the end of August. This includes impressive growth across various benchmark rates. For instance, Euribor ADV grew by 50%, SONIA ADV by 56%, and Gilts ADV by 48%. This upward trend is a clear indication of increasing activity and engagement within these markets.

Positive Market Dynamics

Caterina Caramaschi, Vice President of Financial Derivatives at ICE, attributes the healthy state of the €STR market to robust end-user demand, which benefits from the deeper liquidity available at ICE. She expressed gratitude to all market participants for their continued support in the development of €STR futures. This collaboration has also led to the execution of the first €STR option trade, marking a significant step forward.

Commitment to Multi-Currency Products

As a unique player in the market, ICE is the only global exchange to provide liquid, multi-currency short-term interest rate products. Caramaschi highlighted that ICE is dedicated to expanding its franchise, providing more tools as the market evolves. By optimizing the trading and clearing of €STR at ICE, customers can enjoy margin offsets of up to 90% against Euribor, allowing them to effectively manage their financial strategies.

Inter-Contract Spread for Enhanced Flexibility

Market participants are actively utilizing the inter-contract spread offered by ICE to trade the differences between Euribor and €STR, a feature designed to enhance flexibility and liquidity within the contracts. This adaptability mirrors trading opportunities commonly found in over-the-counter markets.

Diverse Interest Rate Derivatives Offering

ICE boasts a broad range of multi-currency interest rate derivatives, which include key benchmarks such as Euribor, SONIA, SARON, and Gilts. Furthermore, SONIA futures set a new record with 2.4 million contracts in open interest on September 11. This reflects ICE’s commitment to fostering a comprehensive interest rate derivatives marketplace.

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs and operates digital networks designed to connect people to opportunities in the financial sector. Their extensive financial technology and data services span various major asset classes, enabling customers to access essential workflow tools that improve transparency and efficiency.

ICE operates multiple exchanges, including the esteemed New York Stock Exchange, alongside clearing houses that facilitate investment, capital raising, and risk management. The exchange is recognized for its substantial markets in trading and clearing energy and environmental products, while also offering fixed income, execution capabilities, and insightful analytics.

ICE is also instrumental in transforming U.S. housing finance through its ICE Mortgage Technology initiative, streamlining processes from initial consumer engagement to long-term servicing. Together, these innovations connect customers to opportunities across diverse industries.

Frequently Asked Questions

What is €STR futures and why is it important?

€STR futures are financial contracts based on the euro short-term interest rate, which are crucial for managing interest rate risk in the eurozone.

How much open interest did ICE's €STR futures reach?

ICE's €STR futures open interest surpassed 500,000 contracts, indicating a strong market demand.

What was the increase in average daily volume in ICE's interest rate portfolio?

The average daily volume across ICE's interest rate portfolio rose by 55% year-over-year.

What are some other benchmarks offered by ICE?

In addition to €STR, ICE offers benchmarks such as Euribor, SONIA, SARON, and Gilts.

What benefits do customers receive by using ICE for €STR trading?

Customers benefit from margin offsets of up to 90% against Euribor and enhanced flexibility in trading through ICE's inter-contract spreads.

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