Chicago-based trading software provider Trading Technologies hosted its first TT Tech Tap Live event Tuesday afternoon with Eris Exchange to discuss its U.S. dollar-denominated interest rate swap futures contract.
The exchanges open interest has been steadily climbing, with 140,000 contracts in October.
The contracts, cleared via the Chicago Mercantile Exchange Clearing, embeds the cash flows of an over-the-counter interest rate swap and provides significant capital savings to clients through margin offsets with CME Eurodollars and Treasury futures positions, according to panel member Eris CEO Neal Brady. He called the contract a futures contract solution to the complexities of Dodd-Frank.
Contracts can be held until final maturity as futures contracts (no physical delivery or mandatory early termination. Also, the existing OTC swap curves and models can be used to value Eris Swap Futures.
Also on the panel was Don Wilson, CEO of DRW, a principal trading organization. “We’re customers of the swaps market as well as liquidity providers on Eris and we also use Eris as a hedging tool,” Wilson said.
Eris is a Chicago-based futures exchange (designated contract market) regulated by the U.S. Commodity Futures Trading Commission (CFTC). Eris swap futures contracts can be traded on TT’s X-Trader platform.