CBOE Holdings, Inc. CBOE announced that it has made a minority investment at the latest, interest rate derivatives venture of several major dealer banks and the London Stock Exchange Group (“LSEG”) – CurveGlobal. With this deal, CBOE Holdings has become the only U.S. exchange to participate in the venture. The financial terms of the transaction remain undisclosed.
CurveGlobal will initially offer Short Term Interest Rate (STIR) futures in Short Sterling and Euribor. It will also offer Long Term Interest Rate (LTIR) futures in Bund, Schatz, Bobl and Gilts. More products will be introduced post launch. Each product tailored and backed by CurveGlobal will be traded on LSEG’s London Stock Exchange Derivatives market and will be cleared through LCH.Clearnet. The CurveGlobal product trading is pending regulatory approvals and is expected to commence during the second quarter of 2016.
With the regulatory changes in recent times, cost of trading interest rate derivatives has become an expensive affair. Thus, at this juncture, the rollout of the cost-efficient CurveGlobal is expected to be a respite for banks and other market participants which seek capital-efficient ways for hedging and trading different products. Notably, the derivatives venture is expected to offer a wide range of products with promises for better trading and lower transaction costs through LSEG’s trading and clearing portal.
CBOE Holding’s investment into CurveGlobal should be fruitful as it is a unique venture that responds to the increasing requirements of the marketplace. Thus, the company expects profitable return in the long-run from this new investment.
Being the global options exchange in the U.S., CBOE Holdings is strengthening its position in the futures business. Over the past few years, the company has significantly expanded its operations through a strong business model. The aforementioned initiative further reflects the company’s commitment to fortify its global reach and generate profits.
Stocks to Consider
Some other stocks that boast a strong market position in the finance sector are Blue Capital Reinsurance Holdings Ltd. BCRH, Nasdaq, Inc. NDAQ and eHealth, Inc. EHTH.
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