Basis trading for market-on-close transactions currently takes place OTC. What are the main challenges?

In my opinion, the market is currently quite fragmented. Trading is taking place OTC through brokers. It is quite costly and also not very transparent. All in all, it is a very inefficient process with high counterparty risk and a high chance of failure.

As a Market Maker, what are the main drivers for you to trade Eurex MOC Futures?

Flow Traders are a major Market Maker in the ETP space. For us, it makes perfect sense to also act as Market Makers for Market-on-Close Futures, because we get a lot of exposure and deltas at the end of the day when the liquidity is highest. We all try to do as much as we can to get the most efficient pricing for everybody in the market.

What are the main benefits for market participants?

For market participants, it will now be a far more easily accessible market and a far more efficient way to trade the futures, market-on-close. They can easily see where the futures are priced and traded.

For market participants, it will now be a far more easily accessible market and a far more efficient way to trade the futures, market-on-close. They can easily see where the futures are priced and traded.

Pieter Entius, Head of Trading at Flow Traders

How can firms start using these products today?

It is available for everyone who has access to Eurex Futures, so no new access is required. You just use your current set-up.

How do you expect Eurex MOC Futures and similar products to evolve in the future?

I think the demand of MiFID II and the need for more transparency, more efficiency, and less risk is the first step towards a bright future. If they are a big success, it would be worth expanding into a range of other equity futures. I expect this one to be the first trial, which then leads to new upcoming futures.