CME Group adds Monday expiries to U.S. Treasury Options suite

Rick Steves

Move aims to provide market participants with enhanced risk management tools amid record volumes and volatility.

CME Group, the world’s leading derivatives marketplace, has unveiled an expansion to its U.S. Treasury options suite, adding Monday expiries to the existing Wednesday and Friday options.

The move aims to give investors increased flexibility for managing risks, especially those that can develop over weekends and around key market events.

Historic volatility and record risk transfer taking place in the U.S. Treasury market

Amid a backdrop of record-setting volumes and heightened volatility in the U.S. Treasury market, the additional expiry options come at a critical time. Agha Mirza, CME Group Global Head of Rates and OTC Products, remarked, “Our short-term options provide enhanced opportunities to navigate the historic volatility and record risk transfer that is taking place in the U.S. Treasury market.

“In today’s uncertain rate environment, Fed meetings, economic reports and other data-driven indicators are increasingly driving risk for our clients. With this in mind, we added Monday expiries to our U.S. Treasury options suite to enable additional hedging across the yield curve for weekend risk.”

The announcement coincides with CME Group’s year-to-date record average daily volume (ADV) of 1.1 million contracts in U.S. Treasury options, including a record ADV of 348,000 contracts in Weekly U.S. Treasury options.

Margin Offsets and Portfolio Margining

Weekly U.S. Treasury options are subject to the rules of CBOT and will receive automatic margin offsets against existing CME Group Interest Rate futures and options. The new contracts are also slated to become eligible for portfolio margining against other cleared interest rate swaps, as well as futures and options, shortly after their launch.

The addition of Monday expiries is expected to be a boon for market participants looking for more precise tools for risk management, particularly in an era characterized by significant market swings and uncertainty.

The move is likely to fortify CME Group’s position as a key player in the derivatives marketplace, offering a broader array of options for investors seeking to hedge against market risks.

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