Maybe you can help me with the question about trading on CFE.

With which broker can I trade S&P 500 Variance Futures (VA)?


The market for Variance futures on the CBOE Futures Exchange is unfortunately inactive, there is not much trading if any on most days. (Probably they will be delisted soon?). Some other CFE futures contract (such as VIX) are very active and can be traded for example on Interactive Brokers. The broker is not the issue, it is just that the VA contract is a failure so far.

  • $\begingroup$ Variance futures replicate OTC Variance Swap exactly. Is this means that OTC Swaps have very low activity too? $\endgroup$ – user26085 Jan 12 '17 at 20:55
  • $\begingroup$ I think that, on the contrary, there is plenty of activity in OTC. First mover advantage and all that. CFE tried to steal the business but could not do it. Everyone stayed in OTC, and the big boys GS, etc. are happy that they held on to the business. Too bad for the noob's like me. $\endgroup$ – noob2 Jan 12 '17 at 22:05
  • $\begingroup$ One thing else is unclear for me: the mechanism of margin requirements for OTC Variance Swaps. I dont saw in supplementary information to OTC Swaps the rules of margin maintance or initial margin or something like. How the counterparts guarantee (without margin like in futures trading) that trade losses do not exceed the initial deposit amount? $\endgroup$ – user26085 Jan 13 '17 at 8:53
  • $\begingroup$ To trade OTC you (usually) have to sign a CSA en.wikipedia.org/wiki/Credit_Support_Annex and an ISDA Mater Agreement which regulates such things. $\endgroup$ – noob2 Jan 13 '17 at 13:35

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