Recently, we announced connectivity to the Moscow Exchange (MOEX), allowing trading of their derivatives products on the TT® platform. The tradability of currency pairs, energy products, precious metals and agriculture products sparked demand from both our buy-side and sell-side clients. I sat down with Arseniy Glazkov, Head of Derivatives from MOEX, to chat more about the exchange, their product offerings and the wide range of interest from institutional to retail traders.
How did you get your start in the industry and how did you make your way to MOEX?
Arseniy: I started at the beginning of 2000 as an equity and derivatives trader. Ten years ago, I joined RTS as head of commodity derivatives development, and in February 2018, I became the Head of Derivatives Market of MOEX.
Our clients have been seeking more international diversity. How will MOEX products and its unique position in the market make an impact?
Arseniy: MOEX’s derivatives market has one of the most diversified product lines in terms of both asset classes and underlying countries of origin. We provide derivatives on indices, single stocks, currencies, interest rates, bonds, precious metals and energy resources. Moreover, MOEX offers a variety of products on international benchmarks, such as Brent, WTI, equity index tracking of the 500 largest U.S. companies and non-ferrous metals.
Much of our end users come from the institutional, professional trading segment. What are some of the compelling reasons to trade on MOEX?
Arseniy: This combination of Russian and international products is highly attractive to non-resident clients. MOEX attracts clients from all over the globe—the share of non-residents is about 45%. Thus, international participants who are brokers, hedge funds, algos, prop firms, banks and market makers can effectively execute a variety of strategies—from macro and risk hedging to arbitrage and market making. Furthermore, MOEX has been recently developing new services for block trading, such as an RFS system, which will be of interest to large professional clients.
Russia has a healthy retail trader environment. What products are a better fit for the retail trader?
Arseniy: Our retail clients mostly like index and currency futures to help diversify their portfolio and effectively hedge their foreign exchange risk. Our energy and precious metal futures also attract retail investors by their affordability—a contract size is quite small compared to the U.S. market—and allow them to fine-tune their investment strategies by taking risk in alternative asset classes.
What do you see on the horizon for the industry and major developments with your exchange that will move the market?
Arseniy: I believe institutionalization will be the next stage in the development of the Russian derivatives market. If we look at the history, we’ll see it started as a speculators’ market in the ‘90s, then it moved to the automation and globalization stage, and now it’s time for large institutional clients such as banks, insurance companies and hedge funds to join in. We have been launching plenty of new IT services aimed at institutional clients’ needs, such as a corporate marketplace, customized interest rate derivatives and RFS.