In this article from the Trade News, Peter Barsoom, COO of ICE, advocates their credit index futures product due to come to market shortly. A few things to highlight:
– Interpreting from the articule, ICE’s proposed contract is a cash-settled credit spread future i.e. a future on each index’s credit spread.
– This does not offer the ability to buy and sell protection and so complements rather than substitutes cleared OTC CDS.
– ICE has a multi-year exclusive license on iTraxx and CDX indexes (agreed in October 2012) from Markit which calculates and produces the indexes.
– It’s interesting that they haven’t gone with a futurized swap (credit index swap economics in an exchange trades future wrapper) or a deliverable swap future.