OTC Flexible Contracts

The OTC Flexible Contracts facility supports OTC trading, clearing and settlement of tailor-made options and futures contracts. This allows traders to customize their trades to meet their individual needs. In this way, Eurex Members benefit from the flexibility of OTC contracts and at the same time take advantage of the efficiency and security of standardized clearing and settlement processes.

Eurex products across all asset classes are available for trading via the OTC Flexible Contracts facility. Thus, market participants can trade and clear equity, equity index, fixed income, commodity and real-estate products1, among others, via the OTC Flexible Contracts facility.

OTC Flexible Options

OTC customers can design OTC Flexible Options by selecting:

• Exercise Price
  The exercise price can be freely defined between the lowest exercise price (e.g. LEPOs) and the highest exercise price (limited to 2.5-times of the highest available standard strikes in the perspective product).
• Expiration Date
  The expiration date can be any business day (with some special Eurex defined exceptions) starting from the next business day until the longest currently active standard expiration date of the affected product.
• Exercise Style
  American or European exercise can be specified.
• Settlement Type
  The settlement type of OTC Flexible Options contracts is arbitrary. For OTC Flexible Equity Options or EXTF Options trades at time of conclusion Members can choose to settle their trades either with cash or with the physical settlement type available for the product.

OTC Flexible Futures

OTC customers can design OTC Flexible Futures by selecting:

• Flexible Maturity
  The participants of an OTC Flexible Futures trade can create their own maturity date for the transaction. Tailored maturity dates can be as early as the next business day or as far out as the maturity date for the most distant respective standard future listed on Eurex.
• Settlement Type
  Similar to OTC Flexible Options on individual equities, OTC Flexible Futures give Members, in most cases, the ability to negotiate the terms of settlement for Single Stock Futures (cash settlement or physical delivery).

Clearing Features

Eurex Clearing has also implemented a series of back office features for OTC Flexible Options to support back office processing.

• Give-up / Take-up functionality
• Position Transfer
• Trade Separation
• Close out / Partial Close-Out
• Exercise / Partial Exercise

Details about how to use the OTC Flexible Options facility, further product information and an overview of all Flexible Options and Futures available for trading can be found in these attached documents:

1 As of expected launch date of February 9, 2009.