Tag Archives: Ice

ICE Bonds Announces Record Notional Volume for Portfolio Trading

Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced record volumes for fixed income portfolio trading during the fourth quarter of 2020.

Over $1.9 billion in U.S.-based notional activity was executed in the fourth quarter of 2020, an increase of more than two times the volume of the previous quarter and the strongest period of activity since ICE first introduced portfolio trading. ICE re-launched its portfolio auction protocol in 2020, making it accessible through ICE FI Select, and has gained steady momentum since then. ICE FI Select offers direct access to the full suite of ICE Bonds execution venues and trading protocols alongside ICE’s Continuous Evaluated Prices and fixed income analytics.

Portfolio trading now makes up nearly 5% of total bond market trading volumes, nearly three times the amount in previous years, according to recent estimates of TRACE (Trade Reporting and Compliance Engine) data. ICE Bonds gives customers a range of options for executing trading strategies across investment grade, high-yield and emerging markets, ranging from Central Order Book access to more efficient workflows for request-for-quote orders and executing baskets of bonds.

“ICE Bonds was established to bring greater efficiency and improved trading protocols to the fixed income markets,” said Peter Borstelmann, President of ICE Bonds and Head of ICE ETF Hub. “With portfolio trading becoming an increasingly important part of our customers’ trading strategies, we’re pleased to see such strong interest from the institutional investment community for our portfolio auction protocol.”

ICE Bonds’ Portfolio Auction allows institutional investors to trade a portfolio of bonds on an all-or-nothing basis to one or multiple platform participants in a discrete, pre-determined period of time. Portfolio Auction offers two distinct trading session formats, At-the-Market or At-the-Close, giving investment managers the ability to leverage either ICE Data Services’ Continuous Evaluated Pricing (CEP) for intra-day trades or End-of-Day Evaluations.

For more information about ICE Bonds, please visit: https://www.theice.com/fixed-income/ice-bonds.

ICE Sets Exchange-wide Open Interest Record

Futures Open Interest hits record 46.8 million contracts

Open interest in Global Energy +8% and Natural Gas +14% year-over-year

Intercontinental Exchange, Inc. (ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced that on November 24, 2020, ICE set an open interest (OI) record of 46.8 million across all futures contracts.

As of November 24, the all-futures open interest record has been driven by year-over-year (y/y) growth in the following areas:

  • Energy OI up 8% y/y, including:
    • Natural Gas OI up 14% y/y
    • Environmental OI up 7% y/y, hitting OI record this month of more than 2.75m contracts
    • Other Crude and Refined OI up 4% y/y
  • Sugar OI up 12% y/y
  • Sterling OI up 11% y/y, hitting OI record this month of more than 4.87m contracts

“We have continually expanded our network of futures contracts to help our customers achieve their risk management needs in the most capital efficient way possible,” said Ben Jackson, President of Intercontinental Exchange. “Whether its managing interest rate risk, energy risk, or providing the markets which allow our customers to price climate risk, we are focused every single day on ensuring this network effectively supports the increasing and evolving global risk management needs of our customers.”

About Intercontinental Exchange

Intercontinental Exchange (NYSE: ICE) is a Fortune 500 company and provider of marketplace infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. We operate regulated marketplaces, including the New York Stock Exchange, for the listing, trading and clearing of a broad array of derivatives contracts and financial securities across major asset classes. Our comprehensive data services offering supports the trading, investment, risk management and connectivity needs of customers around the world and across asset classes. As a leading technology provider for the U.S. residential mortgage industry, ICE Mortgage Technology provides the technology and infrastructure to transform and digitize U.S. residential mortgages, from application and loan origination through to final settlement.

ICE Reports Record Activity Across Its Environmental Complex as Participants Price Climate Risk

Intercontinental Exchange, Inc. (ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today reported record open interest across its environmental complex as participants price climate risk.

The environmental complex – which includes futures and options connected to ICE’s European (EUA) and California Carbon allowances (CCA), Regional Greenhouse Gas Initiative (RGGI) and renewable energy credits (RECs) – hit record open interest of approximately 2.65 million contracts on November 12, 2020.

Alongside this record growth in liquidity, the number of participants trading ICE’s carbon markets has grown by more than 40% since 2017. Participants based in North America were the strongest contributor to this growth, increasing by more than 70% since 2017. Meanwhile, the number of participants trading both European and North American carbon markets at ICE has grown by approximately 85% since 2017.

“Liberalized markets are critical to the energy transition as they enable competition between energy sources and in doing so help change behavior by attributing a cost to pollution,” said Gordon Bennett, Managing Director of Utility Markets at ICE. “This record activity, coupled with the growth in the number of participants trading these markets, reflects the fundamental role market-based mechanisms like carbon cap and trade schemes play in pricing climate risk.”

Companies subject to carbon cap and trade programs and renewable standards use ICE’s markets to meet obligations and manage their risk in the most cost-effective way and policy makers rely on price signals from environmental markets, such as those traded on ICE, to gauge the effectiveness of their programs and ensure desired outcomes.

As a growing number of companies sign up for voluntary commitments around the world, increasingly diverse stakeholders are turning to ICE’s markets to offset their carbon footprint, invest in green attributes or benchmark their internal cost of carbon. Investors use the price signals from ICE’s markets and indices to help assess climate transition risk in their portfolios, and access liquidity pools for managing risk and allocating capital to benefit from energy transition opportunities.

ICE has been a leader in environmental markets for nearly two decades. ICE has a range of additional solutions including Sustainability Indices that serve as fixed income sustainable benchmarks that account for Environmental, Social and Governance (ESG) factors. These include the ICE Global Carbon Futures Index, which is part of the ICE Carbon Index Family, and measures the performance of a long-only basket of ICE EUA futures contracts, ICE California Carbon Allowance futures contracts, and ICE Regional Greenhouse Gas Initiative futures contracts. Alongside this, the MSCI ESG Index Futures listed on ICE Futures US offer customers a variety of ESG-related futures for benchmarking and managing risk.

Intercontinental Exchange Launches Clearing for CDS Index Options

Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced it has launched clearing for Credit Default Swap (CDS) Index Options, bringing greater capital efficiencies, price discovery and risk management to the CDS market. Beginning today, ICE Clear Credit now offers clearing of Index Options on the CDX North American Investment Grade and High Yield indices. Index Options on the iTraxx Europe indices are expected to be added in 2021.

ICE Clear Credit’s Index Options solution provides a number of innovations including a common exercise-and-assignment platform where all market participants, dealers and buy-side, can perform time-critical decision making in a centralized, risk-managed and technologically advanced fashion. To establish a robust and transparent price discovery process, ICE Clear Credit uses an extension of its current end-of-day approach to Single Name and Index clearing to determine executable mark-to-market levels for CDS Index Options and provide convenient access to these daily prices.

“The launch of CDS Index Options leverages ICE’s market infrastructure and robust risk management methodology and builds on the tremendous momentum we’ve seen across our CDS complex,” said Stan Ivanov, President of ICE Clear Credit. “By incorporating Index Options into our existing capital efficient risk management approach to CDS clearing, we’re bringing new tools to our customers to access the CDS market, and to execute cost-effective and versatile strategies to manage risk.”

“In close consultation with market participants, ICE Clear Credit is introducing CDX options clearing which will enhance standardization and transparency in the market,” said Amy Hong, Head of Market Structure Strategy for the Global Markets Division at Goldman Sachs. “The offering is intended to drive efficiencies, improve risk management and further promote the product.”

To help determine margin levels across portfolios, customers can use ICE’s state-of-the-art CDS risk management system, PACE, which leverages a Monte Carlo simulation framework and provides significant improvements over common modelling practices. Index, Single Name and Index Option instruments are analyzed and managed through the same general CDS portfolio framework computing consistent, efficient and reliable risk measures.

“Clearing CDS index options is an exciting development for the CDS market. Cross-margining across indices and options, and ICE Clear Credit’s exercise-and-assignment platform should bring about capital efficiencies and enhance operational risk management on expiry dates,” said Ali Balali, Managing Director in the Global Credit group at BofA Securities.

Through the third quarter of 2020, ICE Clear Credit cleared nearly $25 trillion two-sided notional amount of CDS instruments, representing and 11% growth over the same period in 2019. ICE Clear Credit is on track to achieve record index volumes in 2020 for both its dealer and client cleared business, having exceeded in the third quarter of 2020 the total index notional amount cleared during all of 2019. Additionally, the Single Name notional amount cleared at ICE Clear Credit has significantly grown each year since 2015, driven by sovereign Single Names and Single Names referencing corporate entities domiciled outside of North America.

Launched in 2009, ICE Clear Credit and ICE Clear Europe CDS clearing solutions offer clearing for more than 500 Single Name and Index CDS instruments based on corporate and sovereign debt and have reduced counterparty risk exposure by clearing over $283 trillion in two-sided notional amount, with combined open interest of approximately $2.0 trillion.

For more information about ICE Clear Credit, please visit: https://www.theice.com/credit-derivatives/options.

Oil price below $105

October crude oil fell $1.72, or 1.6%, to settle at $104.67 a barrel, its lowest close since August 21. The contract, which expired at the close of trade on the New York Mercantile Exchange, lost 3.3% for the week.
The spread between Nymex WTI crude and Brent crude traded in London widened Friday. On ICE Futures, November Brent crude rose 46 cents, or 0.4%, to $109.22 a barrel, rebounding a bit from a 1.7% decline a day earlier. Prices ended 2.2% lower than a week ago.