just now
CME Group has announced that trading volume in its investment grade and high yield credit futures has exceeded 450,000 contracts since launch, whilst open interest reached a new high of 6,800 contracts on 4 September, representing over $700 million in notional value.
The Chicago-based derivatives marketplace launched the credit futures contracts in June 2024, based on Bloomberg U.S. corporate bond indices. The products are designed to help market participants manage duration risk through intercommodity spreads with U.S. Treasury futures.
Agha Mirza, CME Group Global Head of Rates and OTC Products
Agha Mirza, CME Group Global Head of Rates and OTC Products, said:
With U.S. credit spreads near historic lows, clients are looking for new sources of liquidity to help them mitigate credit risk with precision and efficiency. As uncertainty continues across markets, our credit futures provide clients with a cost-effective hedging solution for corporate bond indexes, with automatic margin offsets available against interest rate and equity futures.
The contracts offer automatic margin offsets against CME Group's interest rate and equity futures, forming part of what the company describes as $60 billion in daily efficiencies delivered to clients across asset classes.
Joe Paccione, Americas Head of Futures and Options Sales and Execution at J.P. Morgan
Sanaz Fazeli, Co-Head Global Macro Credit Sales at J.P. Morgan
Joe Paccione, Americas Head of Futures and Options Sales and Execution, and Sanaz Fazeli, Co-Head Global Macro Credit Sales at J.P. Morgan, commented:
CME Group credit futures are an efficient tool for global institutional investors, offering a streamlined way to manage credit risk and gain targeted exposure. The duration-hedged contracts and derived block functionality are particularly unique, providing enhanced management of credit exposure and flexibility of execution.
Matthew Angelucci, Portfolio Manager at PGIM Fixed Income, noted the products' risk management capabilities:
Credit futures provide an efficient and flexible tool for managing risk in corporate bonds. Across investment grade and high yield debt, our clients can isolate credit and duration risk, while gaining margin offsets with CME Group's deeply liquid futures markets.
The futures are available for trading on CME Globex and eligible for submission to clearing via CME ClearPort. They are listed with and subject to the rules of the Chicago Board of Trade.
CME Group is the world's leading derivatives marketplace, enabling clients to trade futures, options, cash and OTC markets across major asset classes including interest rates, equity indices, foreign exchange, energy, agricultural products and metals.
