Successful launch of new Eurex agricultural derivatives
Start of trading on 20 July 2009 with four agricultural futures
The international derivatives exchange Eurex today expanded its product range to include the agricultural derivatives asset class. Since trading commenced today, Eurex clients have been able to trade four new agricultural contracts: futures on European processing potatoes and potatoes for the British market (London Potatoes), and piglet and hog futures.
All four futures are settled in cash, with the market price indices based on recognized price determination as underlyings. Participants will be able to trade all four agricultural contracts free of charge for the rest of July 2009, and from August to October 2009 for only 50 percent of the transaction fee.
“The new derivatives give market participants the opportunity to protect themselves from increasing price risks in the agricultural segment,” said Michael Peters, member of the Eurex Executive Board. “Our new contracts are aimed at a broad group of clients, including farmers and agricultural cooperatives, trading and slaughter companies and the processing industry.” Investors can profit primarily from the low correlation between the commodity and capital markets; agricultural futures are an ideal form of risk diversification.
The launch of derivatives trading on Eurex’s international platform aims to create an appealing offer in the agricultural futures market and attract new participants to this asset class from the financial sector. Participants from underlying and futures markets in Germany, the Netherlands, France, Switzerland, Scandinavia and the UK indicated great interest in the new Eurex agricultural products during the consultation phase. The product range is set for expansion next year in consultation with market participants.
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