Eurex Exchange is an international exchange which primarily offers trading in European based derivatives. It is the largest European futures and options market. The products traded on this exchange vary from German and Swiss debt instruments to European stocks and various
stock index
In finance, a stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current stock price levels with past prices to calculate market performance.
Two of the pr ...
es. All transactions executed on Eurex Exchange are cleared through
Eurex Clearing
Eurex Exchange is an international exchange which primarily offers trading in European based derivatives. It is the largest European futures and options market. The products traded on this exchange vary from German and Swiss debt instruments to E ...
, which functions as a
central counterparty A central clearing counterparty (CCP), also referred to as a central counterparty, is a financial institution that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement services for trades in fore ...
(CCP) for multi-asset class clearing of the above-mentioned exchange-traded product range as well as over-the-counter traded products.
According to the 2015
Futures Industry Association
The Futures Industry Association (FIA) is a trade association in the United States composed of futures commission merchants. A futures commission merchant is analogous to a broker; they are entities that accept orders and payment for commodity ...
’s annual survey, Eurex Exchange is ranked as the world's third-largest
derivative
In mathematics, the derivative of a function of a real variable measures the sensitivity to change of the function value (output value) with respect to a change in its argument (input value). Derivatives are a fundamental tool of calculus. ...
s exchange by contract volume. The Exchange is headquartered in
Eschborn
Eschborn () is a town in the Main-Taunus district, Hesse, Germany. It is part of the Frankfurt Rhein-Main urban area and has a population of 21,488 (2018). Eschborn is home to numerous corporations due to its proximity to Frankfurt and relatively ...
,
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
, near
Frankfurt am Main
Frankfurt, officially Frankfurt am Main (; Hessian: , "Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on its na ...
, and it is operated by Eurex Frankfurt AG and Eurex Zürich AG, which are public companies wholly owned by the German stock exchange operator
Deutsche Börse
Deutsche Börse AG () or the Deutsche Börse Group, is a German company offering marketplace organizing for the trading of shares and other securities. It is also a transaction services provider. It gives companies and investors access to gl ...
AG.
History
In the 1990s, Europe went through a power shift in its financial sector. London (
LIFFE
The London International Financial Futures and Options Exchange (LIFFE, pronounced 'life') was a futures exchange based in London. In 2014, following a series of takeovers, LIFFE became part of Intercontinental Exchange, and was renamed ICE ...
, London Financial Futures Exchange) began to lose dominance in trading German government bonds futures (The Bund) to the Frankfurt-based Deutsche Terminbörse (DTB). This event has come to be known as the ‘Battle of the Bund’.
The DTB was one of the world's first electronic exchanges, and by 1997 had distributed its screens across Europe and into the United States. As the DTB was in the midst of a battle to wrench
liquidity
Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include:
* Market liquidity, the ease with which an asset can be sold
* Accounting liquidity, the ability to meet cash obligations when due
* Liq ...
in the Bund contract away from its chief cross-continental rival, the
open outcry operated LIFFE, it began the merger proceedings with
SOFFEX (the Swiss Options and Financial Futures Exchange). The shift started gradually but then followed a “tipping point” dynamic that began in early 1998.
All of these dynamic changes led in 1998 to the creation of Eurex. Its creation took almost a decade of close cooperation between the DTB and SOFFEX and their parent companies, Deutsche Börse AG and
SIX Swiss Exchange to be completed.
Eurex was jointly operated by Deutsche Börse and the SIX Swiss Exchange with the German group holding 50 percent of the voting rights and 85 percent of the share capital. This joint leadership lasted until January 2012, when Deutsche Börse acquired the remaining shares in Eurex Zurich AG from SIX Group AG, making Deutsche Börse the sole owner of the pan-European derivatives exchange.
Eurex has nine worldwide representative offices.
Trading technology
The open outcry style of trading was still the norm in the US and the UK in 1998.
Eurex Exchange was one of the first to offer a fully
electronic trading platform
In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products ...
as opposed to the traditional forms, such as open outcry or pit trading, available at the time. That means buyers and sellers transact from remote locations and are brought together through an electronic trading platform and network. The platform used today, was launched in 2013 and it is known as the T7 trading architecture. T7 was originally developed by Deutsche Börse Group and it advanced electronic derivatives trading. This robust and reliable trading system connects more than 7,700 traders in over 35 countries, trading more than 7.0 million contracts daily.
References
External links
Eurex ExchangeEurex Clearing
{{Authority control
Deutsche Börse
Financial services companies established in 1998
Futures exchanges