Research: Optimising European Listed Derivatives Market Structure

We're delighted to share with you research produced by Acuiti, in association with Cboe Europe Derivatives (CEDX), titled, 'Optimising European Listed Derivatives Market Structure'.

To download full the report, click here.

The research explores why volumes in European derivatives, particularly options, have stagnated in recent years and what can be done to ignite growth in the future. It is based on a survey and series of interviews with senior executives and trading heads at 57 firms operational in European and US listed derivatives markets across the hedge fund and proprietary trading markets.

Respondents to the survey said that a relative lack of retail trading and the fragmentation of market structure were the key reasons why growth was slower in Europe when compared to the US.

Other key findings include:

• 71% of respondents say they would prefer to execute their options trades on-screen but are prevented from doing so due to prevalence of liquidity in OTC markets 
• 62% said Europe’s fragmented market structure had impacted their trading strategies in European options, with 50% allocating more to other regions as a result
• 88% said US options were significantly or somewhat cheaper than European options due to wider spreads associated with European options

CEDX has been designed to tackle many of the weaknesses the research has identified. We’re aiming to grow European derivatives volumes again by promoting on-screen trading and a pan-European ecosystem, that simplifies access to and dramatically reduces costs for those wishing to access this market.

You can learn more about CEDX here.

Disclaimers:

• The above is the product of external market analysis commissioned on behalf of Cboe Europe B.V. The views expressed herein are those of the research company and do not necessarily reflect the views of Cboe Europe B.V., Cboe Global Markets, Inc. or any of its affiliates. For more information on how this research was conducted and/or the data used please contact [email protected]
• The information provided is for general education and information purposes only. No statement provided should be construed as a recommendation to buy or sell a security, future, financial instrument, investment fund, or other investment product (collectively, a “financial product”), or to provide investment advice.
• This information is not being provided as part of an offer or sale of any derivative products to any investors located in a country where this offer or sale is not permitted.
• Past performance of an index or financial product is not indicative of future results.
• There are important risks associated with transacting in any of the Cboe Company products. Before engaging in any transactions in those products, it is important for market participants to carefully review the disclosures and disclaimers contained at: https://www.cboe.com/us_disclaimers/
• Derivative products are complex and may be suitable only for sophisticated market participants. These products involve the risk of loss, which can be substantial and, depending on the type of product, can exceed the amount of money deposited in establishing the position.