Demand Derivatives to Launch U.S.-Regulated Futures Exchange With Blockchain Clearing - The Industry Spread

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.

Demand Derivatives Corp

Demand Derivatives to Launch U.S.-Regulated Futures Exchange With Blockchain Clearing

October 13, 2018
GMEXDemand Derivatives Corp., a creator of novel derivative instruments, has partnered with exchange and post-trade technology provider GMEX Group to launch a new U.S.-regulated futures exchange and clearing house.

GMEX Group will take a minority equity stake in Demand Derivatives as the two institutions develop the futures exchange RealDemand Board of Trade (“RealBOT”) and clearing house, RealDemand Clearing (“RealClear”).

Scheduled to open in 2019, subject to CFTC and SEC approval, RealBOT and RealClear will seek to eliminate systemic risk, clear almost instantly, significantly reduce transaction costs, lower fees, and provide a new set of risk-mitigation features to market participants.

Robert Krause, Chairman and CEO of Demand Derivatives Corp
Robert Krause, Chairman and CEO of Demand Derivatives Corp

In sum, the exchange’s products intend to solve problems currently affecting the futures industry. Using Demand Derivatives’ four novel and proprietary instrument designs, together with GMEX Group’s cutting-edge technology and blockchain clearing, the exchange is expected to leapfrog existing processes.

The exchange plans to launch four transformative instruments, that include,

  • RealLimit™ Future: Limited-risk futures contract with a cap at maximum loss
  • RealVol® Instruments: Realized-volatility futures and futures options meaning trading risk itself
  • RealDay™ Options — Forward-start daily futures options or hedging event risk inexpensively
  • RealGlobe™ Products — Global index products

All the four instruments will be utilized on most underlying assets. Highest volume assets in each major asset class are scheduled at launch that includes corn in commodities, gold in metals, crude in energy, 10yrs treasury notes in rates and EUR/USD in forex. Other instruments will be added in futures as per market demand.

GMEX will offer a number of key critical technological components including ForumMatch™ centralized Matching Engine, Exchange Administration, Market Data Distribution, FIX API Gateway, Risk Management, and Reporting and Position Management, combined with innovative blockchain technology.

Robert Krause, Chairman and CEO of Demand Derivatives Corp., commented: “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.”

Hirander Misra, Chairman of GMEX Technologies and CEO of GMEX Group
Hirander Misra, Chairman of GMEX Technologies and CEO of GMEX Group

Hirander Misra, Chairman of GMEX Technologies and CEO of GMEX Group, 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.” Mr. Misra added, “Their derivative instrument designs have the potential to substantially reduce risk and dramatically cut costs to market participants.”

GMEX Fusion will power the trading platform to deliver a number of key solution components including the centralized Matching Engine, Exchange Administration, Market Data Distribution, FIX API Gateway, Risk Management, and Reporting and Position Management, combined with innovative blockchain technology.

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