It is incredible the products the CME Group keep developing to efficiently manage risk. Coming in October they will be releasing products that lenders and other institutional financial market users will benefit from. 30 year UBS TBA Futures.
Here are some highlights:
Futures' efficiencies are coming to the mortgage market on Oct. 3***
On Oct. 3, we're launching physically delivered monthly futures on 30-Year Uniform Mortgage-Backed Securities (UMBS) TBAs, giving mortgage lenders, issuers, and servicers an exchange-traded, centrally cleared, and globally accessible liquidity pool for hedging. About 30-Year UMBS TBA futures:
Contract design adheres to well-established TBA market standards.
For each delivery month, futures will be listed for delivery on specified active mortgage coupon rates (e.g. 2.0%, 2.5%, 3%, 3.5%, 4%, 4.5% and 5%).
Contract utilizes DTCC/MBSD TBA delivery mechanism to align with existing operations.
Block trades in dollar rolls are eligible for 1/16 ticks