Eurex
Eurex is a derivatives exchange within Deutsche Börse Group, with related services for completing trades. Banks, asset managers and trading firms use Eurex to buy and sell futures and options, contracts whose value depends on an underlying asset or market rate. Orders are matched through an electronic trading system.
Market participants use those contracts to manage exposure to price changes or take positions in financial markets. Eurex provides a common trading venue, while Eurex Clearing acts as the buyer to each seller and the seller to each buyer in cleared transactions. This central counterparty collects collateral and manages the payment and delivery obligations that follow a trade.
From DTB and SOFFEX to Eurex
Eurex was formed in 1998 when the German futures exchange DTB and the Swiss options and futures exchange SOFFEX merged. Eurex traded electronically from the start, when many derivatives markets still used open outcry on a trading floor. Deutsche Börse became its sole owner in 2012, when it bought the remaining shares from SIX Group, and the T7 trading system has run since 2013.
Eurex comprises a derivatives exchange, a repo platform and, with Eurex Clearing, a central counterparty. The three legal entities are Eurex Frankfurt AG, Eurex Clearing AG and Eurex Repo GmbH. Products include interest rate futures, equity and index options and futures, dividend and volatility products, crypto derivatives and commodity derivatives.
Eurex Clearing as central counterparty
A central counterparty becomes the buyer to every seller and the seller to every buyer, so a trader carries the risk of the clearing house and no longer the risk of the firm on the other side. Eurex Clearing does this for trades on Eurex, on Eurex Repo and on the Frankfurt Stock Exchange. Learn how a clearing house uses margin and default funds.
Eurex Clearing AG is a credit institution under the German Banking Act, supervised by BaFin. Eurex Clearing was authorized as a central counterparty under EMIR on 10 April 2014, has been registered with the US Commodity Futures Trading Commission as a derivatives clearing organization since 1 February 2016, and has been recognized by the Bank of England under UK EMIR since 26 July 2023.
Euro clearing and the active account requirement
After Brexit much of the clearing of euro interest rate swaps stayed in London. The EU answered with EMIR 3 and its active account requirement: EU firms subject to the clearing obligation must hold an active account at an EU central counterparty and clear a representative share of certain derivatives there. According to the summary from Deloitte, the classes in scope are OTC interest rate derivatives in euro and Polish zloty and short-term interest rate derivatives in euro, and firms below 6 billion euros of outstanding notional are exempt only from the representativeness obligation under Article 7a(3)(d). Article 7a(4) retains the other active-account requirements for those counterparties. ESMA set out the operational conditions in its final report.
The city had already gained from Brexit on the banking side: Goldman Sachs, Morgan Stanley, Citibank and UBS set up their EU hubs there, The Local reported.
Crypto derivatives and DLT collateral
Eurex lists futures and options on the FTSE Bitcoin and FTSE Ethereum indices, including nano futures at a hundredth of a bitcoin, and Eurex Clearing clears them. Eurex Clearing also launched a service that moves collateral on a distributed ledger with the technology firm HQLAX. Learn more about the work of Deutsche Börse in crypto and digital assets.
Upcoming trading and capital markets events in Frankfurt
Where derivatives people meet in Frankfurt
Traders, quants, risk managers and the technology teams of banks and trading firms meet at Finance Loop events in Frankfurt. Finance Loop works with Finteda, a practitioner network that began as a Frankfurt meetup for fintech builders, quants and data engineers. Explore trading in Frankfurt and learn more about quant finance in Frankfurt.
What is Eurex?
Eurex is the derivatives exchange of Deutsche Börse Group in Frankfurt, formed in 1998 from the German DTB and the Swiss SOFFEX. Eurex lists futures and options on interest rates, equities, indices, dividends, volatility, commodities and crypto assets.
What is Eurex Clearing?
Eurex Clearing AG is the central counterparty of Deutsche Börse Group. Eurex Clearing clears trades on Eurex, Eurex Repo and the Frankfurt Stock Exchange, collects margin from its clearing members and stands between buyer and seller until settlement.
What does Eurex Repo do?
Eurex Repo GmbH runs a trading platform for repurchase agreements, in which one party sells securities and agrees to buy them back later. Banks use repo to borrow cash against collateral or to borrow specific securities, and Eurex Clearing clears the trades.
Who supervises Eurex Clearing?
BaFin is the primary supervisor, as Eurex Clearing AG is a German credit institution. Under EMIR a college of supervisors coordinated by ESMA takes part, and authorities in the United States, the United Kingdom and other countries have recognized or registered it.
Eurex and Finance Loop
Finance Loop covers derivatives, clearing and collateral in its Investment & Digital Assets and also its Risk & Compliance tracks, including crypto derivatives and collateral on a distributed ledger. Finance Loop meets traders and quants in Frankfurt, with Finteda as a practitioner partner.
Finance Loop is a professional network supporting the institutional use of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.