Eurex launches futures and options on exchange-traded funds

Eurex, the European derivatives exchange, yesterday provided investors with a new hedging tool by launching futures and options on exchange-traded funds (ETFs).

The contracts cover futures and options on three Euro Stoxx indexes, an index based on the Dax German equity index and one based on the Swiss Market Index (SMI). Eurex is the first exchange to offer futures and options on European ETFs.

Eurex said the ETF derivatives, which will form a new market segment called EXTF, are designed along the same lines as its existing equity options. “EXTF futures and options are an ideal complement to the existing index derivatives segment and a logical extension of one of the most successful financial innovations in recent years,” Eurex said.

Deutsche Börse, a parent company of Eurex along with the Swiss Exchange, launched European ETFs in April 2000. It now lists 63 index funds and 16 actively managed equity funds. The Swiss Exchange introduced ETFs in March last year.

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