Trade carbon emission and fixed income futures with Equiti

Futures as CFDs on EUAs, German Bunds and UK Gilts now offered

19 April 2023


Carbon emission futures

For those looking to trade carbon dioxide emission allowances, Equiti is now offering the capability to trade European Union Allowance (EUA) futures. EUA is the official name for Europe’s carbon emission allowances, which in 2008 was defined as the official Kyoto Summit allowance for countries in the EU. One EUA entitles the holder to emit one ton of carbon dioxide (or a carbon-equivalent greenhouse gas). New EUA’s are issued each year on 28th February to each company subject to the EU’s emission trading scheme, such as power stations, and are designed to cap the amount of carbon dioxide that can be emitted by these large installations.

The European Union’s emission trading scheme is the largest in the world and began operating in January 2005. EUA futures are traded in EUR, typically with a minimum ticker size of 0.001, in trade lots of 1,000 EUAs and using 1 EUA as the contract base.

Fixed income instruments

In addition to carbon emission futures, Equiti is also now offering the opportunity to trade interest rates via two fixed income instruments. Trading interest rates typically involves buying/selling a futures contract on a selected bond. As expectations of interest rates rise, so the value of the underlying bond will fall, and vice versa. Equiti will be offering futures contracts on two such instruments.

  • Euro bond futures

For those wishing to trade euro bonds, Equiti will be offering euro futures contracts using a notional German government bond with a remaining term comprised between 8.5 and 10.5 years. Bunds are issued by the German federal government, auctioned in the primary market and actively trade in the secondary market. Contract values are typically Eur 100,000, with a minimum ticker size of 0.001 and a tick value of Eur 1. They are highly liquid debt securities, eligible to be used as insurance reserves for trusts and accepted by the European Central Bank as collateral for its credit operations. Bund futures are the most actively traded interest rate future contracts within the euro-zone and most popular contract on the Eurex Exchange. The choice of this instrument offers maximum liquidity.

  • UK Gilt futures

In addition to Bund futures, Equiti will also be offering clients the capability to trade Gilt futures. A Gilt futures contract is based on a basket of UK government bonds. These will typically be instruments with a maturity date between 8 years and 9 months to 13 years. Each contract has a defined coupon and a nominal value of £100,000. The price is quoted per £100 nominal with a minimum ticker size of 0.001 and a tick value of £1.