august 2012. agenda introduction how to participate? products overview and trading ideas final...

August 2012

Agenda

Introduction

How to participate?

Products overview and Trading Ideas

Final Remarks

Introduction

• MexDer is the derivatives subsidiary of BMV Group the financial exchange operator in Mexico.

• Fully electronic market place, as a self-regulated

exchange it has a flexible legal framework.

• CME Group and MexDer joined forces to link the trading platforms, a world of opportunities is brought closer to you.

• MexDer is the leading market place for trading derivatives

on Mexican benchmarks.

Making sense of MexDer With the CME Group – MexDer order routing agreement MexDer products will be

available in more than 100,000 CME Globex® screens.

No Withholding Taxes when trading in MexDer.

Free Convertibility.

Active participation of foreigners in the underling.

No local presence required in Mexico.

Omnibus Accounts: Rule 30.7 (CFTC) segregation (anonymous) One for Proprietary trading. One for Customer trading.

CFTC approved products

Co-location

DMA

Collaterals accepted in the US.

Remote Membership.

Give Ups.

6 Clearing Members.

46 Mexican Trading Members.

8 Active Remote Members.

20 Market Makers.

Participants

Liquidity and Strength - AAA Clearing House - Asigna

Fitch Rating

Standard & Poor’s

Moody’s

Local RatingAAA (mex)

mxAAA/mxA-1+ local currency

Aaa.MX

Global Rating

BBB+/A-2 local currency

A2

Collaterals Accepted

Accepted in the US

US Dollar (cash).

T-Bills.

T-Notes

Accepted in Mexico

Eligible Mexican Stocks

Eligible Mexican Bonds

Cetes (Mexican Treasury Bills)

Order Routing Agreement (CME-MexDer)

N2SCME members and its

clients are be able to trade MexDer’s products.

MexDer’s products could be

traded in the 100,000 CME’s GLOBEX® connections.

S2NMexDer’s member and its

clients will have access to all the CME products through MexDer’s screen.

Risk Management Gateway (RMG)

Overview.

The Risk Management Gateway (RMG) is a web-based dashboard used to monitor, configure and control Futures & Options “Orders” and “Risk Filters” within the RMG system.

Mexican Clearing firms will be responsible to control and configure those risk filters and view order blotter for accounts which they are entitled to see, only for their customers.

The RMG dashboard provides access to the following functions:

Viewing orders Viewing order message chains Cancelling orders Viewing risk filters Creating risk filters Modifying risk filters Deleting risk filters Enabling risk filters Disabling risk filters

Pre-Trade Checks

“Quantity” FilterReject any order with size bigger than a specified number, this filter applies for any asset class product (Futures or Options).

“Quantity per Symbol and Side” FilterReject any order with size bigger than a specified number on a specific class and side

“Symbol, Side, Order Type, Time in Force” Filter”Reject any order matching a specific combination of symbol, side, order type, time in force and a time window (start time and end time).

“Value” FilterReject any order exceeding a specified value (notional value)


Aggregated Checks

Daily Credit Limit Control for Net Long/Short Margin

Reject any order exceeding the limit margin set by symbol once the aggregated amount has reached the set limit.

“Daily Quantity” Filter

If the aggregated traded volume exceeds the specified value for the day, cancels and or rejects the orders resting on the book and the incoming ones. If an order is cancelled, the unfilled quantity should be removed from the day’s accumulated quantity. If an order is modified, the number of contracts should be added or removed from the day’s aggregated total. The Clearing Firm can optionally set the Side field to only check daily value for a particular side. If Side is unset it will be ignored and treated as a wildcard.

“Daily Quantity per Symbol and Side” Filter

Reject any order that exceeds the maximum daily quantity for a daily quantity entry. An entry consists of a symbol, side, and maximum daily value. Each entry maintains its own limit and tracking. When orders exceed a limit on an entry it should only reject orders matching that entry. Other entries that have not exceeded their threshold should continue to allow orders through.


“Daily Value” Filter

The RMG will cancel the orders resting on the book and not allow new orders into the trading engine if the notional value exceeds the specified value for the day.

If an order is cancelled or modified in size, the change in value will be removed or added to the day’s aggregated total.

“Daily Value per Symbol and Side” Filter

The RMG will cancel the orders resting on the book and not allow new orders into the trading engine if the notional value exceeds the specified value per side for the day.

If an order is cancelled or modified in size, the change in value will be removed or added to the day’s aggregated total.


Agenda

Introduction

How to participate?


Final Remarks

Mexico GLOBEX Hub

Match Engine

40 Mbps line

40 Mbps line

Lines to GLOBEX

GLOBEX Infrastructure

USUS

MEXICOMEXICO

MCM(Asigna Clearing Member)

(One letter to access MexDer directly)

Business Opportunities in MexDer

HF Trader

Fund

HF Trader

Clearing Member at CME Group

Customers trade directly through certified trading

systems.

DMA

Paperwork required

How to participate?

1. As a Member of a Recognized Market

2. As an Omnibus Account in MexDer

3. As a Client of a MexDer Omnibus Account

4. As a Remote Member

http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html

How to participate?

1. As a Member of a Recognized Market. Fastest and easiest way to take advantage of the CME

Group – MexDer order routing agreement (ORA) .

Have access to CME Globex

Direct execution in MexDer, Co-location available.

Clears through a MexDer Clearing Member (MCM), the only paperwork required.

2. As a MexDer Omnibus Account.

3. As a client of a MexDer Omnibus account.

4. As a Remote Member. Non-Clearing Remote Membership with direct access to the trading system clearing

through a local Clearing Member


Mexico GLOBEX Hub

Match Engine

40 Mbps line

40 Mbps line

CMEG Member:As a Client of an

MCM

Lines to GLOBEX


USUS

MEXICOMEXICO


(Paperwork required)

Account with MCM required

(1) As a Member of a Recognized Market

Co-location available

How to participate?1. As a Member of a Recognized Market

Executing as a customer of a Trading Member or even through an Omnibus Account.

2. As a MexDer Omnibus Account. The CME member that qualifies as an omnibus

account executes directly in MexDer and

clears through a MexDer Clearing Member. Minimum legal paperwork required with

MexDer. The omnibus clients identity is not disclosed.

3. As a client of a MexDer Omnibus account

4. As a Remote Member. Non-Clearing Remote Membership with direct access to the trading system clearing

through a local Clearing Memberhttp://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html

(2) As a MexDer Omnibus Account

Mexico GLOBEX Hub

Match Engine

40 Mbps line

40 Mbps line

CMEG Member :As a MexDer Omnibus

Account

Lines to GLOBEX


USUS

MEXICOMEXICO



Account with MCM required

How to participate?1. As a Member of a Recognized Market.


2. As a MexDer Omnibus Account . The CME member that qualifies as an omnibus account executes directly in

MexDer and clears through a MexDer Clearing Member. The omnibus clients identity is not disclosed.

3. As a client of a MexDer Omnibus account When executing through an Omnibus Account, you will

only need one simple letter to notify MexDer. Trade through your existing agreement with the CME

Member (registered omnibus in MexDer)4. As a Remote Member.

Non-Clearing Remote Membership with direct access to the trading system and clearing through a local Clearing Member


Mexico GLOBEX Hub

Match Engine

40 Mbps line

40 Mbps line

Customer:As a Client of a MexDer

Omnibus Account

Lines to GLOBEX


USUS

MEXICOMEXICO

(3) As a Client of a MexDer Omnibus account


CMEG Member:

Omnibus Account

(One simple letter to access MexDer directly)

How to participate?1. As a Member of a Recognized Market.


2. As a MexDer Omnibus Account . The CME member that qualifies as an omnibus account executes directly in MexDer

and clears through a MexDer Clearing Member.

The omnibus clients identity is not disclosed.3. As a client of a MexDer Omnibus account

4. As a Remote Member. Non-Clearing Remote Membership with direct access to

the trading system.

Legal paperwork required with the Exchange.

Clear through a MexDer Clearing Member.


(4) As a Remote Member

Mexico GLOBEX Hub

Match Engine

40 Mbps line

40 Mbps line

Lines to GLOBEX


USUS

MEXICOMEXICO


Account with MexDer Clearing Member required


(Paperwork required) Co-location available

CMEG Member:

MexDer member & Omnibus Account

FIX Access

MexDer provides Access via (FIX) protocol

Certified ISV’s in MexDer: Certified ISV’s in Globex to trade MexDer:

**Proprietary trading systems.

Agenda

Introduction

How to participate?


Final Remarks

Products overview

ILCTRAC

BCTRAC

Products available through the CME ORA

Asset Class Futures Globex Symbol

FX Dollar-Peso Futures M:DA

FX Euro Futures M:Euro

FX Monthly Dollar-Peso Futures M:DEUA

Equity Index IPC Index Futures M:IPC

Equity Index Options on Mexican Stock Exchange M:IP

Equity Index Rollover Futures for IPC M:SIPC

Interest Rates 3-Year Bond Futures M:M3



Interest Rates 20 -Year Bond Futures M:M20


Interest Rates 28-Day Interbank IR Futures M:TE28

Interest Rates 91-Day T Bill Futures M:CE91

Interest Rates 2-Year (26x1) IR Swap Futures M:02

Products available through the CME ORA… cont

Asset Class Futures Globex Symbol

Interest Rates 10-Year (130x1) IR Swap Futures M:10

Interest Rates 10-Year IR Swap Futures M:SW10

Inflation Index Inflation Index Futures M:UDI

Single Stock Futures* América Móvil L M:AXL

Single Stock Futures* Cemex CPO M:CXC

Single Stock Futures* Femsa UBD M:FEM

Single Stock Futures* Gcarso A1 M:GCA

Single Stock Futures* Telmex L M:TXL

Single Stock Futures* Walmex V M:WAL

Single Stock Futures* BRTRAC 10 M:BRT

Single Stock Futures* ILCTRAC ISHRS M:ILC

Single Stock Futures* GMEXICO M:GMEX

Single Stock Futures* CEMEX M:CXCA

Single Stock Futures* Rollover Futures for AXL M:SAXL

* U.S. market based participants are restricted from trading the Single Stock Futures

For more information on MexDer products, please visit www.mexder.com.mx

Bond Futures & Trading Ideas…

Underlying, Bonds issued by the Mexican government (BBB+).

The most actively traded securities in Mexico.

A benchmark for Mexican domestic interest rates.

Most efficient way to hedge and short positions.

Spread Trades and arbitrage opportunities. Adjust portfolio duration.

Anticipate shift in slope of yield curve.

Take advantage of perceived price anomalies.

Settled through physical delivery using conversion factor pricing.

Common denominator to spread: CTD (Cheapest to Delivery).


Source: Banxico

Trade the whole yield curve of the Mexican Sovereign that is available:

3 Year Bond (M3) 5 Year Bond (M5) 10 Year Bond (M10) 20 Year Bond (M20) 30 Year Bond (M30)+ 91 Day Treasury CETE.

Foreign Investment in MXP Debt Government Securities

IPC Index Futures & Trading Ideas…

The IPC is a capitalization Index and the leading indicator of the Mexican Stock Exchange performance.

The easiest and cheapest way to hedge and short the Mexican equity market.

Active participation of local and foreign investors

Return

2012: 7.96% MXN / 15.06% USD**

MexDer Ticker Symbol: IPC

Quotation: IPC Points

Size: IPC x $10 MXP

Tick: 5 points

Maturity Months:Quarterly,

up to one year

Settlement: Cash

Trading Hours:07:30 - 15 hrs.

(GMT -06:00)

Bloomberg < MMDD >ISA <INDEX>

CT

Reuters MXN/FUTEX1 0#IPC:

Several opportunities available with the Future of the IPC spreads with:

IPC Future vs S&P 500 E-mini. IPC Future vs Naftrac and EWW (ETFs) . IPC Future vs Equity cash basket. IPC Future vs Mexican ADR’s.

Common denominator: Contracts notional / Face value.

IPC Index Futures & Trading Ideas…

Options on the IPC Future

This contract gives access to volatility trading on the IPC and represents an efficient hedging tool for Mexican equities.

CFTC approved product.

Liquidity - Constant bids and asks in the front maturities and in a wide range of strike prices.

MexDer

Ticker Symbol:IP

Style: European

Size: IPC x $10 MXP

Tick: 1 point

Maturity Months:Quarterly,

up to one year

Settlement: Cash

Trading Hours:07:30 - 15 hrs.

(GMT -06:00)

Bloomberg < MMDD >ISA

<INDEX> OMON

Reuters MXN/FUTEX1 0#IPC*.XD:

Implied Volatility: 14.96% **

Volatility Index Mexico (VIMEX) vs VIX®

USD/MXN Future Contract

USD/MXN volume increased due to the local pension funds.

Active participation of domestic, foreign members and local pension funds.

Arbitrage opportunities with the CME MXN/USD Futures.

Agenda

Introduction

How to participate?


Final Remarks

Final remarks

• Opportunity to participate in a developing market .• End customers, FCMs, prop traders, high

frequency traders.

• Easy access

• Market Making incentive program.

• Liquidity and depth in the underlying securities; development in their derivatives contracts to follow.

• Be part of the development of this new and exciting market!

38

It’s never been so easy….

Contact Us!

+52 (55)

5342-9930

From the US:

1 866 MEXDER1

[email protected]

The leading Marketplace for trading derivatives on Mexican benchmarks

Berenice Corral

august 2012. agenda introduction how to participate? products overview and trading ideas final...

Documents

risk filters

cme products

introduction mexder

sense of mexder

mexican trading members

mexders products

trading derivatives

proprietary trading