Tradition reveals Volatis volatility trading service
The platform is hybrid because it combines voice and electronic negotiation tools and trading in multiple asset classes. Daily fixings are provided by a neutral market data provider, while clearing is done by CME Clearing.
At first, Volatis will offer indications in block trades of cash settled futures contracts offered by CME Group exchanges on NYMEX WTI crude, NYMEX Brent crude, NYMEX natural gas, COMEX gold, COMEX silver and CME currency pairs EUR/USD, AUD/USD, GBP/USD, USD/JPY.
“Volatis is the first platform that allows negotiation and subsequent clearing of realised volatility futures across asset classes with a variance payoff,” said Rupert Hodges, chief executive of Tradition FX, energy and equities. “The offering enables volatility exposure without the strike risk and complexity inherent in an options portfolio. It also gives access to increased trading opportunities which, in turn, means better hedging of your exposure to, or correlation trading against, implied volatility.”