The German stock exchange and Eurex are establishing an integrated market for trading in euro-denominated U.S. equities as well as exchange-traded funds and stock options on the Xetra and Eurex trading platforms. The trades will be settled within Clearstream Banking. The market is expected to be up and running by September.

The “Xetra US Stars” will contain all stocks in the Dow Jones Industrial Average, S&P 100, Nasdaq 100 and Dow Jones Global Titans 50. Goldman Sachs and Morgan Stanley will function as U.S. market experts making markets in U.S. stocks and providing liquidity, quoting continuously binding bid and ask prices with a minimum of  50,000 Euros per quote. This will optimize the quality of trading in U.S. equities for retail and institutional investors and bring the costs down to the level of a domestic securities transaction: U.S. equities can be traded on Xetra just as quickly, easily and cheaply as German blue chips.

The Eurex derivatives market will initially list around ten options on highly liquid U.S. stocks including Cisco, IBM, Intel and Microsoft. At least three market makers per option will provide for the underlying liquidity. Futures and options on the Dow Jones Global Titans 50 index, which contains the shares of 27 U.S. companies, have already been trading in the Eurex equity index derivatives segment since the end of April.

Dow Jones Indexes will incorporate the prices of U.S. stocks traded on Xetra in the Dow average and Dow Jones Global Titans 50 index calculation. This means that the DJIA will be calculated from the opening in Germany, before the U.S. market opens. Real-time updating of the Dow will begin at 03:00 ET daily, but the “official” Dow average calculation will take over as usual at 09:30 ET when component pricing will shift to the New York Stock Exchange and NASDAQ markets from the Deutsche Boerset.

The exchanges are introducing U.S. stock trading as the first step toward its Global Markets Concept. At a press conference in Frankfurt on Thursday, the partners emphasized that they wanted to set up further markets based on the same design. Next on the agenda is the creation of markets based on the Dow Jones STOXX 50 and  Dow Jones Euro STOXX 50 indices as well as for the Asia-Pacific region.