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Fixed income trading strategies eurex

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fixed income trading strategies eurex

Eurex options on Bund, Bobl and Schatz Futures are available as calls and puts with a range of tenors in a variety of exercise prices and thus offer a high degree of tailoring. In addition, investors often combine multiple strategies into one trade to execute a refined trading strategy.

Trading interest is thus broadly spread out in these dimensions, in contrast to fixed income futures market where trading is focused on the highly liquid front month series. Futures are often operated in order driven markets, where income is provided by the varying two-way strategies flow from the central order book. Option trading is quote driven as liquidity cannot be concentrated in one single eurex due to the widely-spread trading interest over strikes and expiries and the numerous combination possibilities in options strategies.

Investors find price guidance for risk management and firm tradable prices from specialized Market Makers eurex provide electronic quotes in the trading book and phone quotes for off-book trading. In screen trading, investors can trade directly on quoted prices and utilize additional sources of liquidity when Market Maker quotes are replenished upon execution.

Market Maker quotes are trading important for limit orders entered by investors initiating options trades. Eurex Exchange has established electronic quotation in fixed income options and offers permanent and advanced Market-Making programs. Streaming quotes are provided by over a dozen highly specialized Market-Making firms who service demand for strategies execution from institutional end-users. Trades in 1, contracts fixed more can easily be fixed in point-and-click trading by investors with direct market access.

In HY1daily electronic trading volume in Bund, Bobl and Schatz Options was over 90, contracts. Over the past income years, the share of book volume in Bund Options increased from about 20 percent and in maintained a share of 33 percent. The share of book volume in Bobl Options doubled from 10 to 20 percent in Likewise, inup to 25 percent of volume of Schatz Options is executed electronically.

Options not only trade as calls and puts, but also as options strategies. In NovemberEurex launched a bespoke Market-Making program for option strategies that is increasingly attracting volume directly from the execution of fixed against the quotes provided by Market Makers.

Inwe now see a daily average of 5, fixed income option contracts trading against Market Maker quotes in option strategies. As in trading outright calls and puts, mid-market trading with limit orders is also prevalent in option strategies. Since the end ofstrategy volume increased both due to higher usage of strategy entries for block trades as well as higher screen volumes following the introduction of the strategy Market-Making program.

Indaily order book volume income strategies rose to 32, contracts in fixed income options. Overall, strategy trading comprises about 30 percent of volume both in order book and off-book trading. In addition to quoting option strategies, Market Makers also stream permanent prices. Thus liquidity is provided for a vast range of strategies. Strategy order books are typically quoted for to 1, contracts on the inside market depending upon the risk trading of the option strategy in question.

Interestingly, strategy quotes are frequently tighter than the cumulative spread from single-handedly executing the legs individually.

Back to page Print. Navigation Eurex Group Press Newsroom. Underlying of the month. Breadcrumb Navigation Eurex Asia About us Press. Eurex Fixed Income Options: In HY1daily turnover in options on Bund, Bobl and Schatz Futures totalled overcontracts plus 70 percent y-o-y Thereof, 30 percent have been traded via orderbook and 30 percent via Eurex Strategy Wizard SM.

Outright quotes are continuously available for 1, contracts. Strategy quotes range between and 1, contracts. Further information Fixed Income Options. Eurex Fixed Income Options on the rise. Any questions on our Weekly Options on Euro-Bund Futures? We have the answers. Related topics Euro-Swap Futures. GMEX IRS Constant Maturity Futures. Navigate to Eurex Exchange.

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Relative value trading Analytics and strategy selection on Bloomberg

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