Calendar spread functionality in derivatives market

NZX Limited
Level 1, NZX Centre
11 Cable Street
PO Box 2959
Wellington 6140
New Zealand
Tel +64 4 472 7599

www.nzx.com

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13 March 2018

Calendar spread functionality implemented in dairy derivatives market

NZX announces the addition of calendar spreads and implied order functionality on all futures
contracts in the dairy derivatives market, effective 19 March 2018.

The implementation of these strategies will provide NZX dairy traders with a more efficient
method of rolling positions into future contract months. It is also expected to facilitate additional
liquidity through tighter bid/ask spreads and increase orders in later-dated contracts.
NZX Head of Derivatives Nick Morris commented: “Calendar spread functionality is a valuable
tool for derivatives traders, it has the potential to significantly improve on-screen liquidity and
volumes traded. This change follows feedback from our customers, and we intend to continue
updating functionality requirements in response to market demand.”

The increased functionality supports the exchange’s strategic commitment to accelerate growth
in its dairy derivatives market, and follows an announcement that market trading hours will be
extended in July 2018 to meet global requirements.

To learn more about the benefits of calendar spreads, the types of implied order functionality
available, and how they work, please see NZX’s Guide to Calendar Spreads at the link below:

www.nzx.com/markets/nzx-dairy-derivatives/learn-more

NZX will continue to engage with participants, clearers, independent software vendors and data
vendors on the upcoming changes. Minor amendments to the Derivatives Market Procedures
have been made to facilitate the introduction of calendar spreads, which will come into effect on
19 March 2018. Information on these changes can be found here.

For further information please contact:
Hannah Lynch
Head of Communications
T: 09 308 3710
M: 021 252 8990
E: hannah.lynch@nzx.com