How global credit will work in futures

The DESK: How has Eurex’s credit futures growth today reflected the global market’s expansion?Davide Masi: Over the past decade, the global corporate bond market has grown significantly, supported by increased issuance and investor demand for yield and diversification. This expansion has been accompanied by a shift towards more electronic, transparent and standardised trading mechanisms, particularly as traditional OTC markets have faced operational, regulatory and balance sheet constraints.As a result, the growth of Eurex Credit Index Futures reflects a broader structural transition in credit markets towards standardised, cleared and electronically traded risk-transfer tools, with open interest now representing more than US$6 billion in equivalent notional outstanding.Within this context, Eurex Credit Index Futures have emerged as a natural extension of the electronification trend already observed in rates and equities markets. Clients’ need for greater transparency and operational efficiency has helped listed credit futures in Europe become an increasingly relevant alternative to total return swaps on fixed income indices.TD: What are the key milestones that have driven that success and how does end-user participation and open interest look today?DM: Several key milestones have underpinned the development and scaling of Eurex Credit Index Futures.In terms of product and ecosystem milestones, 2021 saw the launch of EURO Investment Grade Credit Index Futures, marking the entry point into the asset class. Between 2022 and 2024, Eurex expanded into high yield, GBP, emerging markets, and USD benchmarks, positioning itself as the first exchange offering cross-regional credit index futures. In 2025, Eurex launched the Credit Index Derivatives Partnership Program, bringing together leading banks and liquidity providers to structurally support liquidity growth.Key adoption and liquidity inflection points included stronger integration into portfolio and risk management systems, which lowered operational barriers for buy-side adoption. This was accompanied by growth in both on-screen and off-book (block) liquidity, supported by dealer participation, as well as the availability of Eurex’s products across the most popular OTC trading platforms, making it easy for clients to access deep block liquidity.On current participation and market depth: traded notional year to date amounts to US$80 billion, while open interest now exceeds US$6 billion across products, more than double comparable 2025 levels, based on the relevant measurement period. The notional amount traded in blocks, single-counting the roll, is on track to double in 2026 (YTD 2026: US$25 billion; full-year 2025: US$22 billion), as more clients scale their exposure in Credit Index Futures.ChartParticipation spans both buy-side and sell-side institutions. Buy-side (real-money and fast-money) participants drive directional and hedging demand while also implementing relative-value strategies, while sell-side dealers and liquidity providers enhance pricing depth and execution certainty both on- and off-book.Taken together, these milestones highlight a transition from early adoption to a more established, institutional market with diversified participation and meaningful open interest.TD: What does the mix of two-way activity from real money asset managers through to hedge funds mean for pricing and execution quality?DM: The increasing presence of genuine two-way flow across different client segments is a critical indicator of a maturing market and has direct implications for pricing and execution quality.The participant mix reflects distinct but complementary strategies. Real money investors (asset managers, insurers) typically use the contracts for portfolio hedging, cash equitisation, and tactical and strategic asset allocation, while hedge funds and proprietary trading firms are more active in macro relative-value strategies – such as compression/decompression trades and USD vs. EUR credit – and in basis trading such as futures vs credit default swaps (CDS) or ETFs).This diversity of activity creates natural bid-offer balance, rather than reliance on one-sided flows or purely dealer-driven liquidity.As a result of this diverse participation, pricing becomes more competitive and better balanced around fair value, supported by a healthy mix of bank and non-bank liquidity providers. Markets exhibit tighter spreads and improved depth, as multiple participant types contribute to price formation. Execution quality also improves, as liquidity is available across both the central limit order book and bilateral block trading channels.Importantly, the presence of active liquidity providers quoting prices both on-screen and off-book from the outset has helped establish consistent execution standards, accelerating adoption by more price-sensitive institutional investors.TD: How does the cross-currency nature of your offering better support users?DM: The cross-currency nature of the Eurex Credit Index Futures suite is a key differentiator, enabling participants to manage credit exposure on a globally consistent basis.Eurex currently offers futures across EUR and GBP benchmarks (IG and HY) as well as USD benchmarks covering IG, HY, and EM Sovereign.This allows market participants to align their hedging and trading strategies with global portfolio benchmarks, rather than being constrained to a single regional market; to manage multi-currency portfolios within a single, standardised derivatives framework, accessing a global pool of liquidity; and to reduce capital costs through portfolio margining capabilities across rates, credit and FX within Eurex Clearing.In practical terms, this reduces fragmentation by providing a single, consistent toolkit for expressing global credit views, in contrast to the historically siloed nature of regional derivatives markets.TD: Can you explain how cross-margining between the credit index futures suite and broader rates complex works in practice, and what the tangible capital efficiency benefits look like?DM: Cross-margining is one of the most important structural advantages of listed credit index futures within a multi-asset clearing framework.At Eurex Clearing, positions in Credit Index Futures can be risk-offset against other cleared fixed income and FX products through PRISMA, our portfolio-based margining model.In practice, a clearing member holds positions across multiple asset classes (e.g., credit futures, rates futures and FX futures). The clearing house then evaluates the combined portfolio risk, rather than each product in isolation, with margin requirements calculated based on net risk exposure, taking into account correlations and offsets.The tangible benefits of cross-margining are significant. Strategies with natural offsets can achieve improved capital efficiency, with potential margin savings of up to 70% in long credit futures (EUR or USD) versus short rates futures strategies, depending on portfolio composition, risk offsets and clearing member setup. Long/short EUR vs. USD credit futures strategies may achieve potential margin savings of up to 50%, subject to the same portfolio and clearing assumptions. This also creates the ability to scale trading activity, as reduced margin can free up balance sheet capacity, especially in multi-asset and multi-currency portfolios.ChartA diverse notional exposure of €560 million across multiple rates and credit futures boils down to €2.5 million in initial margin charge (Initial Margins <0.5% of the notional exposure).As a result, integrating them into a broader fixed income portfolio allows firms to optimise capital usage across the full risk spectrum, rather than managing siloed exposures.TD: Is the trading workflow supporting execution protocol diversity in credit index futures for on-screen and off-book electronic trading?Yes, the trading workflow for Credit Index Futures has been designed from the outset to support full execution protocol diversity, accommodating different client preferences and trade sizes.For on-screen trading, the central limit order book provides continuous price discovery, transparent bid-offer spreads, and immediate execution for smaller or more standardised trades. Off-book negotiation takes place via voice, chat and electronic trading protocols.At Eurex, we support and welcome OTC-style trading workflows, as we believe they are currently well suited to the development and growth of liquidity in Credit Index Futures. Our approach is therefore to integrate Credit Index Futures into existing OTC-style workflows, allowing market participants to trade portfolio trades, fixed income ETFs and credit futures more seamlessly.This approach allows Eurex Credit Index Futures to bridge the gap between OTC and listed markets. For OTC-style users such as dealers and large asset managers, it provides access to familiar execution protocols and the ability to trade in size with minimal market impact. For broader market structure evolution, it supports migration towards standardised, centrally cleared instruments while retaining the execution flexibility traditionally associated with OTC markets.In practice, the coexistence of on- and off-book protocols ensures that execution quality is maintained across trade sizes and use cases, supporting both systematic and bespoke trading strategies.TD: What has recent volatility revealed about the maturity of the credit futures market?DM: Recent periods of market volatility – particularly during 2026 – have provided an important real-world test of the credit futures ecosystem.Key observations from recent volatility include sustained liquidity during volatile conditions, supported by both on-screen and off-book activity (US$40 billion traded in March – roll trades double counted – and US$20 billion traded in April 2026). There was also increasing use of credit futures as a risk management tool alongside ETFs and OTC derivatives, marking a breakthrough moment in the market, as well as evidence that price discovery remains robust even during dislocations, as exchange-traded instruments continue to provide transparent pricing and two-way client activity helps maintain the balance between demand and supply of risk.In addition, volatility has contributed to higher adoption of block trading, reflecting institutional usage in size, and to greater engagement from hedge funds and relative value traders seeking to capture dislocations across credit futures, ETFs, and CDS indices.Overall, these dynamics suggest that the market is progressing beyond its early developmental phase and demonstrating characteristics of a more resilient and functionally mature asset class.TD: Looking ahead, to what extent do you see credit futures trading reflecting the cash market, with global platforms providing single points of access?DM: Looking ahead, there is a strong case that credit futures trading will increasingly converge with the cash market in terms of accessibility, pricing relevance, and workflow integration.Several structural trends support this view: the continued electronification of fixed income markets, including portfolio trading and ETFs; growing demand for standardised, centrally cleared instruments that can complement or replace bilateral OTC trades; and the integration of credit futures into portfolio management systems and trading platforms, reducing friction for end users.This evolution points towards more unified trading environments, where participants can access cash bonds, ETFs, futures, and swaps through integrated platforms.The synergies among these credit asset classes are now clearly pointing towards an outcome where credit futures provide liquid, standardised beta exposure and hedging tools, while cash markets remain essential for issuer-specific and fundamental positioning.In this sense, Credit Index Futures are increasingly becoming part of the core fixed income trading toolkit: not a replacement for cash bonds, ETFs or CDS, but a complementary listed instrument that can support efficient hedging, scalable beta management and more resilient market structure.The article was first published on The DESK on 15 June 2026Weiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit Weiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit