Demand Derivatives has joined hands with Gmex Group to launch a US-regulated futures exchange, RealDemand Board of Trade (RealBOT), and clearing house, RealDemand Clearing (RealClear).
Gmex Group, a provider of exchange and post-trade business technology solutions, will acquire a minority equity interest in Demand Derivatives to further align interests and share in the project’s success.
RealBOT and RealClear, which are subject to the Commodity Futures Trading Commission (CFTC) and US Securities Exchange Commission (SEC) approval, are expected to open next year.
The two platforms will create new solutions to the existing problems that affect the futures industry.
The exchange’s products will aim to remove systemic risk, clear alomst instantly, significantly reduce transaction costs, lower fees while offering a new set of risk-mitigation features to market participants.
Gmex stated that four new instrument designs, cutting-edge technology, and blockchain clearing will be introduced.
The instruments include RealLimit Futures, a Limited-risk futures contracts (cap a maximum loss); RealVol Instruments, a Realized-volatility futures and futures options (trade risk itself); RealDay Options, a Forward-start daily futures options (hedge event risks inexpensively) and RealGlobe Products, a Global index products (cut costs and control index risk effectively).
The four instruments can be used on most underlying assets. The highest volume asset in each of the major asset classes is scheduled at launch will include corn in commodities, gold in metals, crude oil in energy, 10-year treasury notes in rates, euro/dollar in foreign exchange.
A yet to be named index in equities will also be launched. Depending on market demand, instruments on other underlying assets could be added in the future.
Demand Derivatives chairman and CEO Robert Krause said: “The low latency and cutting-edge technology offered by Gmex make them the perfect partner to advance our goal to bring profound change to the futures industry.”
Gmex stated that its Fusion, live in multiple exchanges across the globe, will power the trading platform to provide several key solution components such as the ForumMatch centralized Matching Engine, Exchange Administration, Market Data Distribution, FIX API Gateway, Risk Management, and Reporting and Position Management, combined with innovative blockchain technology.
Gmex Technologies chairman and Gmex Group CEO Hirander Misra said: “We are delighted and excited that Demand Derivatives has chosen to partner with Gmex to enable their vision to deliver a new generation of regulated futures exchanges.
“Their derivative instrument designs have the potential to substantially reduce risk and dramatically cut costs to market participants.”