CME Offers Month-End Fix FX Futures

CME Group is extending its Basis Trade at Index (BTIC) futures product suite to allow FX traders to hedge the month-end WM Benchmark Fix.

The new FX BTIC+ futures, due for launch on February 6, 2023, will allow users to trade futures at a fixed spread of basis to the month-end benchmark, and will initially be available for EUR/USD. Trading will be available until 3.40pm London time on the day of the Fix – a time when most banks close their windows for accepting orders for the five-minute window that begins at 3.57:30pm.

BTIC futures will be available daily up until the 3.40 London close, the BTIC+ futures will be available to trade until the penultimate day of the trading month.

With market impact continuing to be an issue, especially at the month-end Fix, some users have sought to spread out their execution by trading earlier in the month. This is clearly something CME is seeking to exploit through the new futures launch and, it has to be said, anything that takes flow out of the actual five-minute window can only be a good thing as it is likely to help dampen market impact.