August 2012
Agenda

Introduction
 How to participate?
 Products overview and Trading Ideas
 Final Remarks
Introduction
• MexDer is the derivatives subsidiary of BMV Group
the financial exchange operator in Mexico.
• Fully electronic market place, as a
exchange it has a flexible legal framework.
self-regulated
• CME Group and MexDer joined forces to link the
trading platforms, a world of opportunities is brought closer to
you.
• MexDer is the leading market place for trading derivatives
on Mexican benchmarks.
Making sense of MexDer

With the CME Group – MexDer order routing agreement MexDer products will be
available in more than 100,000 CME Globex® screens.

No Withholding Taxes when trading in MexDer.

Free Convertibility.

Active participation of foreigners in the underling.

No local presence required in Mexico.

Omnibus Accounts: Rule 30.7 (CFTC) segregation (anonymous)
 One for Proprietary trading.
 One for Customer trading.

CFTC approved products

Co-location

DMA

Collaterals accepted in the US.

Remote Membership.

Give Ups.
Making sense of MexDer

With the CME Group – MexDer order routing agreement MexDer products will be
available in more than 100,000 CME Globex® screens.

No Withholding Taxes when trading in MexDer.

Free Convertibility.

Active participation of foreigners in the underling.

No local presence required in Mexico.

Omnibus Accounts: Rule 30.7 (CFTC) segregation (anonymous)
 One for Proprietary trading.
 One for Customer trading.

CFTC approved products

Co-location

DMA

Collaterals accepted in the US.

Remote Membership.

Give Ups.
Participants
 6
Clearing Members.
 46
Mexican Trading Members.
 8
Active Remote Members.
 20
Market Makers.
Liquidity and Strength - AAA Clearing House - Asigna
Collaterals Accepted
Accepted in the US
Accepted in Mexico
 US Dollar (cash).
 Eligible Mexican Stocks
 T-Bills.
 Eligible Mexican Bonds
 T-Notes
 Cetes (Mexican Treasury Bills)
Local Rating
Fitch Rating
Standard & Poor’s
Moody’s
Global Rating
AAA (mex)
mxAAA/mxA-1+ local currency
BBB+/A-2 local currency
Aaa.MX
A2
Order Routing Agreement (CME-MexDer)
N2S
CME
members
and
clients are be able to
MexDer’s products.
its
trade
MexDer’s products could be
traded in the
100,000
CME’s
GLOBEX®
connections.
S2N
MexDer’s member and its
clients will have access to
all the CME products
through MexDer’s screen.
Risk Management Gateway (RMG)
Overview.
The Risk Management Gateway (RMG) is a web-based dashboard used to monitor, configure and
control Futures & Options “Orders” and “Risk Filters” within the RMG system.
Mexican Clearing firms will be responsible to control and configure those risk
filters and view order blotter for accounts which they are entitled to see, only for their customers.
The RMG dashboard provides access to the following functions:
 Viewing orders
 Viewing order message chains
 Cancelling orders
 Viewing risk filters
 Creating risk filters
 Modifying risk filters
 Deleting risk filters
 Enabling risk filters
 Disabling risk filters
Risk Management Gateway (RMG)
Pre-Trade Checks
 “Quantity” Filter
Reject any order with size bigger than a specified number, this filter applies for any asset class
product (Futures or Options).
 “Quantity per Symbol and Side” Filter
Reject any order with size bigger than a specified number on a specific class and side
 “Symbol, Side, Order Type, Time in Force” Filter”
Reject any order matching a specific combination of symbol, side, order type, time in force and a
time window (start time and end time).
 “Value” Filter
Reject any order exceeding a specified value (notional value)
Risk Management Gateway (RMG)
Aggregated Checks
 Daily Credit Limit Control for Net Long/Short Margin
Reject any order exceeding the limit margin set by symbol once the aggregated amount has
reached the set limit.
 “Daily Quantity” Filter
If the aggregated traded volume exceeds the specified value for the day, cancels and or rejects the
orders resting on the book and the incoming ones. If an order is cancelled, the unfilled quantity
should be removed from the day’s accumulated quantity. If an order is modified, the number of
contracts should be added or removed from the day’s aggregated total. The Clearing Firm can
optionally set the Side field to only check daily value for a particular side. If Side is unset it will be
ignored and treated as a wildcard.
 “Daily Quantity per Symbol and Side” Filter
Reject any order that exceeds the maximum daily quantity for a daily quantity entry. An entry
consists of a symbol, side, and maximum daily value. Each entry maintains its own limit and
tracking. When orders exceed a limit on an entry it should only reject orders matching that entry.
Other entries that have not exceeded their threshold should continue to allow orders through.
Risk Management Gateway (RMG)
 “Daily Value” Filter
The RMG will cancel the orders resting on the book and not allow new orders into the trading
engine if the notional value exceeds the specified value for the day.
If an order is cancelled or modified in size, the change in value will be removed or added to the
day’s aggregated total.
 “Daily Value per Symbol and Side” Filter
The RMG will cancel the orders resting on the book and not allow new orders into the trading
engine if the notional value exceeds the specified value per side for the day.
If an order is cancelled or modified in size, the change in value will be removed or added to the
day’s aggregated total.
Agenda
 Introduction

How to participate?
 Products overview and Trading Ideas
 Final Remarks
Business Opportunities in MexDer
DMA
HF Trader
Fund
HF Trader
(One letter to access MexDer
directly)
Clearing
Member at
CME Group
Lines to GLOBEX
GLOBEX
Infrastructure
US
40 Mbps line
MEXICO
Customers trade directly
through certified trading
systems.
Mexico GLOBEX
Hub
40 Mbps line
Paperwork required
MCM
(Asigna Clearing Member)
Match Engine
How to participate?
1. As a Member of a Recognized Market
2.
As an Omnibus Account in MexDer
3.
As a Client of a MexDer Omnibus Account
4.
As a Remote Member
http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html
How to participate?
1. As a Member of a Recognized Market.

Fastest and easiest way to take advantage of the CME
Group – MexDer order routing agreement (ORA) .

Have access to CME Globex

Direct execution in MexDer, Co-location
available.

Clears through a MexDer Clearing Member
(MCM), the only paperwork required.
2.
As a MexDer Omnibus Account.
3.
As a client of a MexDer Omnibus account.
As a Remote Member.
4.

Non-Clearing Remote Membership with direct access to the trading system clearing
through a local Clearing Member
http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html
(1) As a Member of a Recognized Market
Lines to GLOBEX
CMEG Member:
As a Client of an
MCM
GLOBEX
Infrastructure
US
40 Mbps line
MEXICO
Account with
MCM required
Mexico GLOBEX
Hub
40 Mbps line
MCM
(Asigna Clearing Member)
(Paperwork required)
Match Engine
Co-location
available
How to participate?
1.
As a Member of a Recognized Market

Executing as a customer of a Trading Member or even through an Omnibus
Account.
2. As a MexDer Omnibus Account.
CME member that qualifies as an omnibus
account executes directly in MexDer and
clears through a MexDer Clearing Member.
Minimum legal paperwork required with
The


MexDer.

The omnibus clients identity is not disclosed.
As a client of a MexDer Omnibus account
As a Remote Member.
3.
4.

Non-Clearing Remote Membership with direct access to the trading system
clearing through a local Clearing Member
http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html
(2) As a MexDer Omnibus Account
Lines to GLOBEX
CMEG Member :
As a MexDer Omnibus
Account
GLOBEX
Infrastructure
US
40 Mbps line
MEXICO
Account with
MCM required
Mexico GLOBEX
Hub
40 Mbps line
MCM
(Asigna Clearing Member)
(Paperwork required)
Match Engine
How to participate?
1.
2.
As a Member of a Recognized Market.

Executing as a customer of a Trading Member or even through an Omnibus
Account.
As a MexDer Omnibus Account .

The CME member that qualifies as an omnibus account executes directly in
MexDer and clears through a MexDer Clearing Member.

The omnibus clients identity is not disclosed.
As a client of a MexDer Omnibus account
3.
4.

When executing through an Omnibus Account, you will
only need one simple letter to notify MexDer.

Trade through your existing agreement with the CME
Member (registered omnibus in MexDer)
As a Remote Member.

Non-Clearing Remote Membership with direct access to the trading system and
clearing through a local Clearing Member
http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html
(3) As a Client of a MexDer Omnibus account
Lines to GLOBEX
Customer:
As a Client of a MexDer
Omnibus Account
CMEG Member:
Omnibus Account
GLOBEX
Infrastructure
US
40 Mbps line
MEXICO
(One simple letter to
access MexDer directly)
Mexico GLOBEX
Hub
40 Mbps line
MCM
(Asigna Clearing Member)
Match Engine
How to participate?
1.
As a Member of a Recognized Market.

Executing as a customer of a Trading Member or even through an Omnibus
Account.
As a MexDer Omnibus Account .
2.
The CME member that qualifies as an omnibus account executes directly in MexDer
and clears through a MexDer Clearing Member.

The omnibus clients identity is not disclosed.

As a client of a MexDer Omnibus account
3.
As a Remote Member.
4.

Non-Clearing Remote Membership with direct access to
the trading system.

Legal paperwork required with the Exchange.

Clear through a MexDer Clearing Member.
http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html
(4) As a Remote Member
Lines to GLOBEX
CMEG Member:
MexDer member & Omnibus Account
GLOBEX
Infrastructure
US
40 Mbps line
MEXICO
Account with
MexDer Clearing
Member required
(Paperwork
required)
Mexico GLOBEX
Hub
40 Mbps line
MCM
(Asigna Clearing Member)
(Paperwork required)
Match Engine
Co-location
available
FIX Access

MexDer provides Access via (FIX) protocol
 Certified ISV’s in MexDer:

 Certified ISV’s in Globex
to trade MexDer:
**Proprietary trading systems.
Agenda
 Introduction
 How to participate?
Products overview and Trading Ideas
 Final Remarks
Products overview
BCTRAC
ILCTRAC
Products available through the CME ORA
Asset Class
Futures
Globex Symbol
FX
Dollar-Peso Futures
M:DA
FX
Euro Futures
M:Euro
FX
Monthly Dollar-Peso Futures
M:DEUA
Equity Index
IPC Index Futures
M:IPC
Equity Index
Options on Mexican Stock Exchange
M:IP
Equity Index
Rollover Futures for IPC
M:SIPC
Interest Rates
3-Year Bond Futures
M:M3
Interest Rates
5-Year Bond Futures
M:M5
Interest Rates
10-Year Bond Futures
M:M10
Interest Rates
20 -Year Bond Futures
M:M20
Interest Rates
30-Year Bond Futures
M:M30
Interest Rates
28-Day Interbank IR Futures
M:TE28
Interest Rates
91-Day T Bill Futures
M:CE91
Interest Rates
2-Year (26x1) IR Swap Futures
M:02
Products available through the CME ORA… cont
Asset Class
Futures
Interest Rates
10-Year (130x1) IR Swap Futures
M:10
Interest Rates
10-Year IR Swap Futures
M:SW10
Inflation Index
Inflation Index Futures
M:UDI
Single Stock Futures*
América Móvil L
M:AXL
Single Stock Futures*
Cemex CPO
M:CXC
Single Stock Futures*
Femsa UBD
M:FEM
Single Stock Futures*
Gcarso A1
M:GCA
Single Stock Futures*
Telmex L
M:TXL
Single Stock Futures*
Walmex V
M:WAL
Single Stock Futures*
BRTRAC 10
M:BRT
Single Stock Futures*
ILCTRAC ISHRS
M:ILC
Single Stock Futures*
GMEXICO
M:GMEX
Single Stock Futures*
CEMEX
M:CXCA
Single Stock Futures*
Rollover Futures for AXL
M:SAXL
* U.S. market based participants are restricted from trading the Single Stock Futures
For more information on MexDer products, please visit www.mexder.com.mx
Globex Symbol
Bond Futures & Trading Ideas…
 Underlying,
Bonds issued by the Mexican government
(BBB+).
 The most actively traded securities in Mexico.
 A benchmark for Mexican domestic interest rates.
 Most efficient way to hedge and short positions.
 Spread Trades and arbitrage opportunities.
 Adjust portfolio duration.
 Anticipate shift in slope of yield curve.
 Take advantage of perceived price anomalies.
 Settled through physical delivery using conversion factor pricing.
 Common denominator to spread: CTD (Cheapest to Delivery).
Bond Futures & Trading Ideas…
Foreign Investment in MXP Debt
Government Securities
Trade the whole yield curve of the
Mexican Sovereign that is available:





+
Source: Banxico
3 Year Bond (M3)
5 Year Bond (M5)
10 Year Bond (M10)
20 Year Bond (M20)
30 Year Bond (M30)
91 Day Treasury CETE.
Bond Futures & Trading Ideas…
IPC Index Futures & Trading Ideas…
 The IPC is a capitalization Index and the
leading
indicator of the Mexican Stock Exchange performance.
MexDer Ticker Symbol:
 The easiest and cheapest way to hedge and short the
Mexican equity market.
 Active participation of local and foreign investors
Quotation:
IPC Points
Size:
IPC x $10 MXP
Tick:
5 points
Maturity Months:
Return
7.96% MXN / 15.06% USD**
2012:
IPC
Settlement:
Trading Hours:
Quarterly,
up to one year
Cash
07:30 - 15 hrs.
(GMT -06:00)
Bloomberg < MMDD >
ISA <INDEX>
CT
Reuters MXN/FUTEX1
0#IPC:
IPC Index Futures & Trading Ideas…
 Several opportunities available with the Future of the IPC
spreads with:




IPC Future
IPC Future
IPC Future
IPC Future
vs
vs
vs
vs
S&P 500 E-mini.
Naftrac and EWW (ETFs) .
Equity cash basket.
Mexican ADR’s.
Common denominator: Contracts notional / Face value.
Options on the IPC Future
 CFTC approved product.
 Liquidity - Constant bids and asks in the
front maturities and in a wide range of strike
prices.
Implied Volatility:
14.96% **
MexDer
Ticker Symbol:
Style:
European
Size:
IPC x $10 MXP
Tick:
1 point
Maturity Months:
Volatility Index Mexico (VIMEX) vs VIX®
IP
Settlement:
Trading Hours:
Quarterly,
up to one year
Cash
07:30 - 15 hrs.
(GMT -06:00)
Bloomberg < MMDD >
ISA
<INDEX> OMON
Reuters MXN/FUTEX1
0#IPC*.XD:
 This contract gives access to
volatility trading on the IPC
and represents an efficient
hedging tool for Mexican equities.
USD/MXN Future Contract
 USD/MXN volume increased due to the local pension funds.
 Active
participation of domestic, foreign members and local pension
funds.
 Arbitrage opportunities with the CME MXN/USD Futures.
Agenda
 Introduction
 How to participate?
 Products overview and Trading Ideas

Final Remarks
Final remarks
• Opportunity to participate in a developing
market .
• End customers, FCMs, prop traders, high
frequency traders.
• Easy access
• Market Making incentive program.
• Liquidity and depth in the underlying securities;
development in their derivatives contracts to follow.
• Be part of the development
exciting market!
of this
new
and
Contact Us!
It’s never been so easy….
From the US:
Berenice Corral
bcorral@mexder.com
+52 (55)
5342-9930
1 866 MEXDER1
38
The leading Marketplace for trading derivatives on
Mexican benchmarks