An international derivatives marketplace has reported a significant increase in trading volume within its investment-grade and high-yield credit futures, exceeding 450,000 contracts. On September 4, open interest for these contracts also reached 6,800.
As credit spreads in the U.S. approach historical lows, many market participants are actively seeking new liquidity sources to effectively manage credit risks. An expert noted the growing uncertainty in various markets, emphasizing the value of credit futures as a cost-efficient hedging tool for corporate bond indexes. These futures offer essential margin offsets against both interest rate and equity futures, contributing to the company’s notable daily efficiencies totaling approximately $60 billion across different asset classes.
These credit futures are distinguished as the first products enabling market participants to handle duration risk through intercommodity spreads with U.S. Treasury futures. Launched in June 2024, these contracts utilize Bloomberg U.S. corporate bond indexes, offering investors ways to navigate one of the largest and most liquid fixed income markets globally.
Trading is facilitated through CME Globex, with the option for submissions to be cleared via CME ClearPort. The contracts are listed according to the regulations of the Chicago Board of Trade.
Users can capitalize on these developments to enhance their investment strategies within the context of prevailing market conditions.