Thursday, April 19, 2007

CME Credit Derivative Future Contracts

CME is tapping into the $30 trillion credit market with its single name and index credit default swap future contracts. Eurex is also set to launch future contract on Itraxx CDS indices. This is hardly surprising given the hyper growth in OTC credit derivative market in the last couple years (also in the news today, the overall size of credit derivative market has been growing at 100% three years in a row). It would be interesting to see the impact of exchange involvements on the overall credit market (I.E. on counter-party credit risk, liquidity, etc).