20 Apr 2022 14:49

Moscow Exchange to launch perpetual FX futures on April 26, will introduce this format for all instruments in future

MOSCOW. April 20 (Interfax) - The Moscow Exchange will launch perpetual FX futures on April 26, and this format will introduced for other assets going forward, exchange representatives told reporters during a presentation of the new instrument.

The perpetual futures launched first will be for three currency pairs: dollar/ruble, yuan/ruble, euro/ruble.

This is an estimated one-day futures contract on the exchange rate of a foreign currency against the Russian ruble with automatic prolongation.

As the exchange explained, the new instrument allows one to open a position in the currency and make money on currency fluctuations without having to buy it on the spot market. The main difference between a perpetual futures contract and existing contracts is the automatic daily extension of the contract's life by one day. The contract price is always equal to the rate of the corresponding currency with "tomorrow" settlements on the currency market of the Moscow Exchange .

At the same time, the extension of the futures contract will have to be paid for each day at the money market rate.

This will be much cheaper than a similar purchase of currency in the currency section with a broker's leverage, the exchange's derivatives market managing director said.

Guarantee security will be 10% and the lot will total 1,000 dollars, euros or yuan. The contract price will be calculated in Russian rubles per unit of foreign currency, with a minimum price step of 0.01 rubles and price increments valued at 10 rubles.

The main objective of the instrument is to offer a simple alternative in order to attract a mass investor, the exchange said.

"The advantages of perpetual futures are obvious: it is never executed, so there are no position rollover costs and there is an opportunity for long-term investment. In the future, if there is market demand, we can expand the list of underlying assets of the new instrument," Vladimir Yarovoy, Managing Director for Derivatives, said.

"We want the number of active clients to be 0.5 million per month for the whole derivatives market," Yarovoy said.

This is an ambitious task, he said, because at its peak, the number of active clients was 125,000 investors a month.

In the future, he said, there will be perpetual futures on the real estate index and commodities, and then on stock indices and stocks.