Magazine article Modern Trader

New Year, New Rivals: Eurex US Drops Fees, Takes on New York

Magazine article Modern Trader

New Year, New Rivals: Eurex US Drops Fees, Takes on New York

Article excerpt

As it approaches its one-year anniversary, Eurex US extends its offensive in its fight for market share in U.S. Treasury contracts while establishing another front in stock index products. In this latest effort, the exchange is listing Russell futures, which are currently listed at the Chicago Mercantile Exchange (CME) and the New York Board of Trade (Nybot).

Starting Jan. 1, all Eurex US customers will pay 5 cents per side for all futures and options transactions in U.S. Treasury products. All trades executed in its order book are eligible for the 5 cents rate. Block trades will be subject to a 45 cents per side surcharge.

The new prices replace a scaled structure that charged customers 25 cents, 20 cents or 10 cents per side depending on monthly volume. However, while there appears to be a fee cut across the board, the new structure represents a net fee increase for many traders who have taken advantage of a fee holiday initiated in July. Eurex US traded a record 1.15 million contracts in November, surpassing the previous record in August of 1.04 million. Average daily volume was 57,000 in November.

The trading records coincided with record volume at the Chicago Board of Trade, where the vast majority of US Treasury futures are traded.

Eurex US CEO Satish Nandapurkar says the new pricing structure was initiated after consulting with customers who sought a simpler model. He says this new model is sustainable.

"With the very low cost base and the way we run efficiently, we can sustain this pricing for the Treasury products far out in the future," Nandapurkar says.

CBOT non-members pay 30 cents per side.


Eurex US never intended to challenge just the CBOT Treasury complex. The next targets are Russell 1000 and 2000 products scheduled to begin trading by the end of January. …

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