Mid-Curve Options on index dividend futures, currently only available as an OTC product, can now be traded at Eurex.
Mid-Curve Options (Eurex), or Swaptions (OTC terminology), are listed options that expire on an underlying future with a longer expiry date than the next settling future. These options focus on the next five years of dividends, allowing participants to fine-tune risk management or anticipate changes in dividend expectations.
Eurex, who had a global market share of 86% in dividend derivatives in 2023, aims to further strengthen its leadership position in the listed dividend segment and to facilitate the migration of OTC open interest and trading volumes using the TES Block Trade and Vola Trade functionality providing order book transparency.
"Dividend derivatives have evolved from a tool to hedge expected dividend risk to an outright asset class that attracts many diverse market participants. These new products give traders the ability to express their view on long-term dividend expectations using shorter expiry options in an accessible central market," says Lorena Dishnica, Equity & Index Product Design at Eurex.
- Underlying: EURO STOXX 50® Index Dividend Futures (FEXD)
- Expirations: Quarterly, with delivery corresponding to the maturity of the respective year’s post-option expiration.