NASDAQ OMX to Introduce Derivatives Trading on U.S. Treasuries
Market participants will benefit from more precise hedging and price transparency
NEW YORK, February 6, 2013 — The NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), the world’s largest exchange group, in cooperation with BNY Mellon, the global leader in investment management and investment services, today announced plans to introduce options trading on U.S. Treasury Securities at NASDAQ OMX PHLX®, the largest equity options exchange in the U.S. The first day of trading will take place on February 19th, 2013.
Exchange-traded derivatives on U.S. Treasuries will provide access to new trading and investing vehicles that allow investors to hedge interest rate risk with more precision, using an ‘on the run’ convention. NASDAQ OMX and BNY Mellon will offer a flexible, cost-efficient offering for investors who wish to trade derivatives contracts on specific, underlying U.S. Treasury 10-year notes and 30-year bonds. Options contracts on U.S. Treasury Securities may be traded by qualified investors in securities brokerage accounts.
In addition, NASDAQ OMX will bring derivatives trading on U.S. Treasuries to a community of fixed-income investors who seek capital efficiency, transparency and mitigated counterparty risk because of centralized clearing of options contracts. NASDAQ OMX world-class INET technology, which powers 1 in 10 of the world’s securities transactions, will provide reliability and average trading latencies below 40 microseconds.
“Ten-year notes and thirty-year bonds, are the most heavily traded securities within the fixed income market, and listing options on U.S. Treasuries on our exchange will bring direct market access to global investors,” said Eric Noll, Executive Vice President of Transaction Services U.S. and U.K. at NASDAQ OMX. “It is mission critical for NASDAQ OMX to offer our member firms opportunities within new asset classes and new structures that improve market quality. This partnership will provide investors with an additional level of transparency, deeper liquidity and improved execution efficiency to this new asset class.”
NASDAQ OMX will continue to partner with BNY Mellon on developing products to serve fixed income portfolio market participants and managers.
“We have a uniquely broad and deep range of support services for investors in the Treasury Securities space,” said Scott Posner, Executive Vice President and business executive for BNY Mellon’s Strategic Growth Initiatives group. “Collaborating with NASDAQ OMX was the perfect way for us to leverage our experience and expertise, applying to this important asset class our focus on developing innovative solutions that contribute to our clients’ success. By leveraging the strengths of our two organizations, we can bring the benefits of exchange trading – increased precision in hedging, central clearing, improved transparency and many others, to markets that have previously traded over the counter.”
For more information on NASDAQ OMX fixed income products please visit our website:
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