Derivatives marketplace CME Group announced plans to expand its Nikkei 225 futures contracts with the introduction of yen- and U.S. dollar-denominated Micro Nikkei futures on October 28, pending regulatory approval.
These new micro-sized contracts, valued at 50 yen and $0.50, respectively, “will allow traders to capture Japanese benchmark trading opportunities with greater precision and will add to CME Group’s existing suite of standard and E-mini Nikkei contracts,” said CME Group.
They will complement CME Group’s existing suite of standard and E-mini Nikkei contracts.
“The addition of micro-sized yen- and U.S. dollar-denominated Nikkei futures contracts will allow global market participants to gain efficient access to the broader Japanese stock market while also mitigating FX exposure and allowing more granular trading capabilities,” said Paul Woolman, Global Head of Equity Index Products at CME Group.
He added that the robust demand for Nikkei futures, with nearly 75% of trades in Nikkei futures occurring outside of Tokyo cash hours, highlights the need for around-the-clock liquidity to manage equity risk.
In addition, the smaller size futures contracts are also said to offer greater potential capital and margin efficiency.
Micro Nikkei futures will join CME Group’s growing family of micro equity futures contracts, which have collectively traded over 2.9 billion contracts to date.
The launch of Micro Nikkei futures also marks a significant milestone, coinciding with the 20th anniversary of the listing of the first Nikkei futures contracts on CME Globex in 2004.
Recent trading data highlights the continued popularity of Nikkei futures, with year-to-date average daily volume reaching 41,000 contracts, a 9% increase compared to the previous year. Open interest has also grown to 67,000 contracts, up 2% year-over-year.