IFM & Eurex Exchange educational screencast series

Perhaps you're already trading stocks, ETFs, FX. Why might you wish to consider trading futures, too? Taking Eurex Exchange’s futures as an example, you'll learn that while futures are not exactly the same thing as a stock, bond, or currency, they share many similarities with cash market products while having a large trading cost advantage. We also consider the important safety mechanisms available through exchange traded derivatives that employ a central counterparty.

The leverage from trading futures is greater than in comparable cash markets. We invite you to come see why futures have so much more leverage and how risk management systems make sure losers promptly pay their losses and winners promptly collect their profits. The markets for securities have certain cash flows (dividends, coupons, interest, etc.), whereas futures markets do not have such payments. In this screencast, Eurex Exchange’s futures serve as an example.

How do you learn what the fair value is on an equity index futures contract? In a fair market, how would one determine whether a given value of an instrument is under or overpriced? This session presents a formal methodology for pricing futures, also known as the cost of carry model. It focusses on Eurex Exchange‘s European equity index futures.

How do you learn what the fair value of a bond futures contract is? Unlike equity index contracts, bond futures contracts are systematically too cheap relative to fair value. We invite you to come see why bond futures are priced differently than equity index contracts. Eurex Exchange’s European futures will be used to illustrate examples in this webinar.

Each market has its own personality and behavior. Nevertheless, they usually correlate and during tough times correlations even rise. Still the usual correlation between European and U.S. indexes can give your trading results an added boost. If you’re already trading U.S. equity index futures, why not diversify with Eurex Exchange’s EURO STOXX 50® Index and DAX® Futures?

Most large sovereign nations have their own version of what we call LIBID or LIBOR. In Europe, a prime credit corporation can usually borrow at EURIBOR (European Interbank Offered Rate) flat. We invite you to see how trading the EURIBOR curve at Eurex Exchange is very similar to trading Eurodollars in North America. We also discuss combining EURIBOR trades with Eurodollar trades to create spreads that are sensitive to the relative performance of European versus North American LIBOR. The European debt crisis creates opportunity to trade your opinion of how these two similar interest rates perform going forward.

Many North American traders already know similar U.S. trades as NOB trades (Notes over bonds).We begin by evaluating the various sovereign securities that are eligible to be delivered against the Euro-Schatz, Euro-Bobl and Euro-Bund. Next, we evaluate which of the securities in the delivery basket is the cheapest-to-deliver (CDT). By evaluating the various basis relationships, along with carrying charges, between cash and futures markets; the CTD bond can be determined.

After determining the cheapest-to-deliver (CTD) bond that the future contract is tracking, we aim to understand the volatility properties of the given future and the respective bond. We develop an equation that ties the volatility of the cash market to the volatility of the future markets. Once we understand the Basis Point Value (BPV) of the various future contracts, it’s possible to construct the appropriate spread-ratio depending on how you think the yield curve might change. Strategies for trading parallel and non-parallel yield curve shifts using products available at Eurex Exchange and other global benchmarks are developed.

Having identified the cheapest to deliver (CTD) bond for each futures contract maturity, along with the future contracts’ Basis Point Value (BPV), we can now create trading strategies that deliver profits if one yield curve flattens or steepens relative to another sovereign yield curve. For example, if you thought the Italian sovereign curve might steepen relative to the German sovereign curve, how do you trade this view with an appropriately weighted futures spread? Eurex Exchange’s fixed income futures will be used to illustrate examples in this webinar.

Like the Dow, SPX, Nasdaq, Russell 2k, the European equity markets offer a rich set of indexes that have different volatility properties. You might think small capitalization stocks outperform large capitalization stocks. This webinar evaluates how these various index futures traded at Eurex Exchange (EURO STOXX®, EURO STOXX 50®, DAX® Index Futures) behave relative to one another and U.S. indexes.

Concern that South Europe’s economies are out of sync with Northern Europe has created great uncertainty about which sovereign’s credit will be preserved, and which might teeter towards default and more ratings downgrades. This webinar is focused on how to use Eurex Exchange’s futures markets to trade your opinion about what might happen next. 

Perhaps you own a portfolio of SPX. If you’re not bullish on the S&P500, you might contemplate hedging your exposure to the S&P500 while simultaneously creating a proxy long portfolio versus the DAX®, EURO STOXX®, EURO STOXX 50®, or some other index on which you have a positive view. This webinar discusses how you can synthetically swap your asset exposure from one equity index to another; all with futures, which eliminates tax issues.

If you have a view that one sovereign yield curve will be moving relative to another sovereign yield curve; you may have a trade waiting for you with CHYS. First, we weight the Basis Point Values (BPV) of each sovereign spread in the local market: Euro-Schatz versus Euro-Bund and Short-Term Euro-BTP (Italian sovereign credit) versus Long-Term Euro-BTP Futures. Next we compare the relative BPV of one sovereign spread vs. the other sovereign spread to calculate the proper spread ratio to be duration neutral in each market, currency neutral too if you’re trading Gilt Futures vs. Euro-Bund Futures.

Does the European Central Bank’s (ECB) president Mario Draghi need to prove his inflation fighting credentials or can we expect more dovish policy the ECB? As the U.S. Federal reserve (FED), Bank of England (BOE), Bank of Japan (BOJ) change policy, it changes the “carry” in many of our interest rate markets. If you can anticipate which central bank might be more/less hawkish or dovish; we’ll show you how to create an interest rate spread trade with Eurex Exchange’s interest rate futures to exploit that opportunity. 

VSTOXX® Futures appeal to a broad spectrum of users, from conservative ones to those with a greater appetite for risk. This webinar explains how traders and investors who have long positions in equities or equitiy indexes can offset bad-tail risk by buying VSTOXX® Futures and how those with short positions in equities or equitiy indexescan sell volatility for a partial hedge. Conversely, for those interested in assuming greater risk, this webinar outlines how VSTOXX® Futures can be harnessed to strengthen directional views on the equities markets.