Demand Derivatives To Launch Futures Exchange
Demand Derivatives Corp., a creator of novel derivative instruments, and GMEX Group (GMEX), a leading provider of exchange and post-trade business technology solutions, will combine forces to launch a U.S.-regulated futures exchange, RealDemand Board of Trade (“RealBOT”), and clearing house, RealDemand Clearing (“RealClear”). To further align interests and share in the success of the project, GMEX will take a minority equity stake in Demand Derivatives.
Slated to open in 2019, subject to CFTC and SEC approval, RealBOT and RealClear will create unique and complete solutions to problems currently affecting the futures industry. Specifically, the exchange’s products 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. Four novel and proprietary instrument designs, cutting-edge technology, and blockchain clearing are expected to leapfrog existing processes. The four transformative instruments include:
RealLimit™ Futures — Limited-risk futures contracts (cap a maximum loss)
RealVol® Instruments — Realized-volatility futures and futures options (trade risk itself)
RealDay™ Options — Forward-start daily futures options (hedge event risks inexpensively)
RealGlobe™ Products — Global index products (cut costs and control index risk effectively)
While the four instruments can be utilized on most underlying assets, the highest volume asset in each of the major asset classes is scheduled at launch: corn in commodities, gold in metals, crude oil in energy, 10-year treasury notes in rates, euro/dollar in foreign exchange, and a yet to be named index in equities. Instruments on other underlying assets may be added in the future depending on market demand.
GMEX Fusion, live in multiple exchanges across the globe, will power the trading platform to deliver a number of key solution components including: 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.
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, stated, “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.” Hirander added, “Their derivative instrument designs have the potential to substantially reduce risk and dramatically cut costs to market participants.”
The regulated blockchain infrastructure platform announced the sixth broker-dealer to join.
The proof of concept uses smart contracts from Digital Asset and DLT from VMware.
The network is driving adoption of standardized post-trade swap data models and workflows.
The market maker will contribute real-time crypto market data before expanding into equities.
Pyth is built on a blockchain to handle receipt and distribution of fast-moving data.