Published On: Wed, Jan 21st, 2015

MEFF Launches a Dividend Futures Contract

Antonio J. Zoido Martínez, Chairman, Bolsas y Mercados Españole

Antonio J. Zoido Martínez, Chairman, Bolsas y Mercados Españole

The contract will act as a dividend risk hedging instrument and will offer new opportunities for the execution of strategies and trading

As of January 27th, MEFF, the Spanish Derivatives exchange operated by BME, will list for trading and registration Single Stock Dividend Futures contracts with a larger contracts size, following its approval by the Spanish securities regulator, CNMV.

This contract, to be called “Single Stock Dividend Future Plus” whose notional size will be the dividends of 25,000 stocks, will join the Financial Derivatives segment. In terms of margin calculations, the open position in these new contracts will be netted against that on Single Stock Dividend Futures with a size of 1,000.

MEFF launches this product in order to meet the demand of Market members and their clients, and provide a portfolio hedging instrument in a context of uncertainty as to the dividend policies of some companies, which generates an extra risk in the valuation of derivatives products.

These new contracts, as the Single Stock Dividend Future with a size of 1,000, will have a maximum fee, or cap, of 500 euros per trade.

In addition, the product is backed –unlike OTC instruments – by the reliability of a regulated exchange such as MEFF and its Central Counterparty, BME Clearing.

IRP Journal

Opinion Poll