Total Return Futures: Regional Growth and Financing Replacement Opportunities

This report offers an in-depth look into the use patterns, growth trends and product development roadmap for Total Return Futures (TRFs). TRFs have been growing in popularity in Europe and the US, driven by low trading costs and exposure to a variety of published indexes and custom baskets.

A transition occurring in some markets is the opportunity to trade TRFs instead of Total Return Swaps (TRS), which themselves have been used as a replacement for physical equity short sales and long positions. TRFs are part of the overall evolution of balance sheet management tools that include repo (cleared and bilateral), TRS, futures, and structured products, all of which provide ways to position, manage and hedge. TRFs have become, or are close to, a mainstream leveraged trading product in multiple markets and are used by some dealer desks in Delta One and equity derivatives trading.

TRFs are based on the underlying index’s total return, which includes price movements and cash flows such as dividends. Introduced globally by major European, US, and Asian exchanges, the product set is evolving to meet the differing needs of market participants who use the product to replicate, offset, and trade certain exposures. As TRFs mature, creating custom baskets replicating securities loans or portfolio swaps in equity markets opens up the ability to develop listed products for less active indexes.

This report provides an overview of Total Return Futures: history, use, uptake, and how they compare to alternatives. We look at growth drivers, including the spike in TRF trading volume during the pandemic-induced volatility and the takeaway lessons from that period. We also examine how market participants leverage TRFs offered by exchanges and where the market is headed in the near future.

The report is written for financing desks, repo and securities lending professionals looking to employ TRFs as part of their strategy, and for regulators, technology firms and others wanting to understand trends and changes in the market.

A direct link for Finadium subscribers to this report is

For non-subscribers, more information is available here.

Related Posts

Previous Post
SmartStream taps AI for cash balance onboarding and reconcilations
Next Post
Eurex to build an EU-based liquidity pool for € short-term IRD

Fill out this field
Fill out this field
Please enter a valid email address.


Reset password

Create an account