The Dubai Gold and Commodities Exchange (DGCX), is set to launch an upcoming FX rolling futures contract, starting out with three currencies against the USD. These currencies are the Australian dollar, the Euro, as well as the Pound Sterling. The date that the exchange will start listing these contracts has been set to the 6th of July, 2020.
New Perpetual Futures Contracts
These contracts are set to be perpetual, which means that they will automatically roll over at the close of the trading day, should an open position still exist within it.
Les Male stands as the CEO of DGCX, and gave a public statement about the matter as a whole. He explained that DGCX is very keen on expanding its currency portfolio, and will do so with the upcoming launch of its new FX Rolling Futures contracts. As it stands now, these currencies show the highest levels of liquidity and trade within the international market, according to Male. He is also convinced that this listing on DGCX comes at the perfect opportunity, due to the ongoing volatility in the markets, as well as ongoing demand from DGCX’s market participants.
Providing Unique Hedging Opportunities
Male explained that these contracts would offer a greater access to the international currency markets for its investors, one that has understandable, clear regulations. However, Male stated that the perpetual, open nature of these contracts would further provide for unique opportunities to its clients, ones that will see a more efficient hedge against their various risk exposures.
The announcement on Wednesday went into details regarding the upcoming futures contracts. It explained that the pricing would be done in USD, and the denominated amounts will be 10,000 of the non-USD currency. The exchange itself will also block trading capabilities alongside this.
Institutional Clients Finding Greatest Boon
These rolling futures contracts will be an expansion of these sorts of products on the platform, with it already hosting the same products for the Indian Rupees and G6 currencies. The DGCX claims that its contracts for the Indian Rupee stand as the largest pools of offshore exchange-traded Indian Rupee liquidity, as well.
These new forms of rolling FX futures contracts will be cleared through the Dubai Commodities Clearing Corporation, or DCCC. DCCC stands as a wholly-owned and regulated clearinghouse from DGCX.
Male explained that all traders would be capable of finding these contracts useful, but notes that institutional traders will find the most use out of it. This is due to the protection it provides against forex exchange rate swings, particularly in this stage of heightened volatility.