Intercontinental Exchange announced the launch of a FTSE 100 Index Total Return Future (TRF). It’s a listed alternative to OTC Total Returns Swaps, with increased market transparency. Through TRFs, investors can trade the implied equity repo, taking directional exposure to the FTSE 100 Index.
The TRF aims to replicate the theoretical returns on a FTSE 100 index total return swap in a more cost-efficient and transparent way, allowing participants to manage or gain exposure to the FTSE® 100 index, including its market and dividend risk, without owning the cash underlying.
Caterina Caramaschi, VP for Financial Derivatives at ICE, said in a statement: “The UK market is firmly in focus with our customers who want to gain or manage exposure to the UK economy, and with the TRF, customers can benefit from the existing liquidity across ICE’s FTSE-linked product portfolio as well as the margin offsets available.”
Since the start of 2022, average daily volume across ICE’s FTSE complex is up 8% at approximately 183,600 contracts, while open interest is up 12% at approximately 2.7 million contracts.