Demand 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.
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, 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.
