Alternative Market Briefing

Eurex launches four agriculture futures today at no or reduced trading fees

Monday, July 20, 2009

On July 20 Eurex, the derivatives exchange, is expanding the product range within the asset class of commodity derivatives by launching agriculture derivatives. Trading will start with four futures based on the agricultural products hogs and piglets as well as potato crops (London potatoes and European processing potatoes).

All four futures are settled in cash. For cash settlement, a reference price is used, which represents the value of the physically traded goods. For the respective futures contracts, the following market price indexes are used:

European Processing Potato Index
London Potato Index
Eurex Piglet Index
Eurex Hog Index

Similarly the new futures will be admitted to the OTC Exchange for Physicals Facility. To the start of trading, no transaction fees will be charged for July 2009, in the months of August, September and October 2009 transaction fees will be reduced by 50 percent. Eurex aims to bring the well known advantages of a global network and central clearing system into this market that has had a strong national focus thus far.

The new agriculture futures provide all market participants - from farmers, producers and dealers down to the processing industry - with an opportunity to reduce the increasing price risks in their business. Investors benefit from the low correlation between commodity markets and traditional asset classes if they use agricultural futures for purposes of broader risk diversification. Th......................

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