Milan Galik

Interactive Brokers has become a direct trading participant on CEDX and a direct clearing participant for equity derivatives on Cboe’s pan-European clearing house and CEDX’s clearing provider, Cboe Clear Europe.

“We are thrilled to welcome Interactive Brokers to CEDX, which represents a significant milestone in the exchange’s journey to improve the ability of retail investors to gain access to and benefit from European derivatives, particularly options,” said Iouri Saroukhanov, head of European derivatives at Cboe Europe.

“Interactive Brokers has been a strong collaborator to our successful US options markets for many years, and we look forward to strengthening this collaboration with them in Europe to help improve and grow derivatives markets in the region.”

Launched in September 2021, CEDX initially offered trading in futures and options based on key Cboe Europe single country and pan-European indices, with clearing provided by Cboe Clear Europe.

In November last year, CEDX expanded into equity options, with future expansion of these products in Q1 2024. The derivatives exchange now offers contracts on over 300 European companies.

“We are pleased to introduce access to CEDX and give our clients an additional way to trade European derivatives alongside our existing global stocks, options, futures, currencies, bonds, funds and more from a single unified platform,” said Milan Galik, chief executive at Interactive Brokers.  

“With the addition of CEDX’s extensive European equity options and index derivatives, our clients now enjoy enhanced choice and flexibility, enabling them to manage their European investments more effectively.”

The post Interactive Brokers joins Cboe Europe Derivatives as new trading participant appeared first on The TRADE.

Over the last year, these derivatives exchange groups have helped innovative the marketplace with a wide range of expansions in their respective product suites, increased access to new and existing derivatives, as well as various partnerships which have steered increased growth in this trading segment.

Among the key players in this competitive landscape, The TRADE has selected Cboe Europe Derivatives (CEDX), CME Group, Eurex and Euronext for the 2023 shortlist, following various individual achievements by these venues over the past year.  

Cboe Europe Derivatives (CEDX)

CEDX, Cboe Global Markets’ two-year-old pan-European equity derivatives exchange, has continued to build momentum since its inception in 2021, with over 55,000 index derivatives contracts traded since its launch. Open interest peaked at over 2,000 in March earlier this year. This has led to the derivatives exchange making another appearance in this award category following last year’s nomination. In November last year, CEDX revealed plans to expand its product suite to include single stock options on leading European companies. The first phase of these new products have been confirmed to be available for trading from 6 November 2023, including options on over 130 companies from 12 European companies, and will be cleared by Cboe Clear Europe N.V. Several firms have recently confirmed their support of CEDX’s expansion into equity options, including: ABN AMRO Clearing, All Options, Barak Market Making B.V, Goldman Sachs, Morgan Stanley, Susquehanna International Securities. Interactive Brokers also confirmed it will connect to CEDX to trade the range of products offered by the exchange, including single stock products.

Elsewhere, CEDX and ION announced a new collaboration in August. As part of the agreement, ION provides direct access to CEDX via its cleared derivatives all-in-one automated trade workflow solution, XTP Execution, which offers Tier one banks and brokers integrated order management, connectivity and order execution. The direct trading connectivity means users of the ION solution will gain access to CEDX’s futures and options markets for single country and pan-European equity indices.

CME Group

Alongside its peers, CME Group is shortlisted for the 2023 Editors’ Choice Outstanding Derivatives Exchange. At the end of last year, CME Group and cryptocurrency benchmark indices provider CF Benchmarks launched three new decentralised finance (DeFi) reference rates and real-time indices, beginning 19 December 2022. The reference rates and real-time indices are calculated and published by CF Benchmarks on a daily basis. Elsewhere, in July, CME Group and The Depository Trust & Clearing Corporation (DTCC) enhanced their existing cross-margining arrangement to increase capital efficiencies for clearing members which trade and clear both US treasury securities and CME Group interest rate futures. The new expansion will allow eligible clearing members to gain increased margin efficiencies between US Treasury securities and CME Group interest rate futures, with changes expected to launch in January 2024. Since announcing the expansion, CME Group has received approvals from both the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) for their enhanced cross-margining arrangement.

CME Group also announced a restructuring of its foreign exchange businesses in August, seeking to expand trading opportunities and increase efficiency for its clients across futures, cash and OTC markets. CME Group combined its FX derivatives markets and its EBS cash markets business, with the combination set to be leveraged in a bid to increase efficiency, improve client service and enhance product development.

Eurex

Eurex is once again recognised in this award category after a nomination at Leaders in Trading 2023. Towards the end of last year, Eurex expanded its interest rate segment with the launch of three-month Euro STR futures referencing €STR. Eurex stated the launch is an important milestone in both the establishment of the €STR as the new benchmark risk-free rate, and in expanding the exchange’s EUR-denominated fixed income product offering. Eurex Frankfurt also partnered with Trading Technologies (TT) in February to offer the Eurex EnLight selective request-for-quote (RFQ) solution directly through the TT platform. According to the two firms, the partnership provides institutions of TT’s global distribution network the opportunity to streamline their RFQ and larger scale, complex trade execution activity on a single screen.

Eurex became the first exchange in Europe to offer Bitcoin index futures in April, with the new contract developed by Eurex in partnership with global index provider FTSE Russel and institutional-grade digital asset data provider Digital Asset Research (DAR). According to Eurex, institutional investors had been waiting for a contract based on a robust underlying index from an established index partner, which is supported by an AA-rated clearing house in Europe. The new futures are traded in EUR and USD, providing trusted access to cryptocurrencies in a regulated market through Eurex. The derivatives venue was also chosen by State Street and BNY Mellon to centrally clear European transactions in May and September, respectively. In the same month, Goldman Sachs became the latest sell-side institution to join Eurex’s listed FX futures business as a trading and clearing member which Eurex described as a “major milestone” in its ambition to become a listed FX liquidity hub in Europe.

Euronext

Rounding up our prestigious list of outstanding derivatives exchanges is Euronext. Euronext operates the second largest equity derivatives market in Europe in terms of number of contracts traded. The product scope covers derivatives on Euronext’s main local benchmarks and also a wide range of pan-European equity futures and options. Towards the end of 2022, Euronext made additional maturities up to ten years available on the total return future on the CAC 40 Index, addressing investor demands for more long-term capital efficiency. The listed solution allows clients to trade total return swaps with volumes continuously increasing. On 5 January 2023 the contract hit a milestone with one million lots traded, followed by two consecutive monthly volume records, with 79,792 contracts traded in January 2023 and then 84,449 lots traded in February. At the end of H1 this year, the TRF had traded almost 300,000 lots traded, representing €25bn of value, as much as in the full year 2022.

Euronext has also made advancements in the building of its fully-integrated clearing house, Euronext Clearing. All derivatives, including those on Euronext’s Italian markets, will be part of the same liquidity pool providing increased efficiencies to clients. This liquidity pool, together with the ability of Euronext to be more innovative, will scale up the derivatives franchise and make the segment more attractive to investors, the exchange told The TRADE. Elsewhere, in Q1, Euronext launched its new web-based Euronext Trader GUI to provide members with improved access to the derivatives market. Euronext Trader was developed in-house with technology acquired along with Borsa Italiana. Over €11.5bn of nominal value has been traded through Euronext Trader on the Amsterdam, Paris and Brussels marketplaces so far this year (as of 6 October 2023), with 416k contracts traded, including 125k index futures and 291k equity options.

The post Leaders in Trading 2023: Meet the nominees for… Outstanding Derivatives Exchange appeared first on The TRADE.

Following regulatory approvals, the available products are set to be expanded by the end of Q1 2024, and plans are in place to begin Cboe’s Liquidity Provider Programme for all equity options after the March 2024 expiry period. 

The single stock options traded on CEDX will be cleared by Cboe Clear Europe N.V. In addition, stock settlement on options exercise and assignment will take place in domestic Central Securities Depositories, “removing unnecessary costs and allowing for settlement netting with relevant cash equities transactions,” according to the business.
 
Several firms have confirmed their support of CEDX’s expansion into equity options, including: ABN AMRO Clearing, All Options, Barak Market Making B.V, Goldman Sachs, Morgan Stanley, Susquehanna International Securities, and Interactive Brokers.

Interactive Brokers is set to become a direct trading participant on CEDX, as well as a direct clearing participant for equity derivatives on Cboe Clear Europe N.V.

Iouri Saroukhanov, head of European derivatives at Cboe Europe highlighted the importance of support from users: “We are delighted to have secured the support of such a strong group of participants to support the launch of single stock options on CEDX. Their support demonstrates the need for a more efficient options marketplace in Europe as envisioned by CEDX, which is designed from a pan-European point-of-view, increases competition and lowers barriers to entry for institutional and retail investors.

“CEDX will offer first class levels of efficiencies to options participants from a trading and clearing perspective, including margin efficiencies and domestic stock settlement on options exercise, to help grow options markets in Europe,” he added.

Cboe launched its equity derivatives exchange CEDX in September 2021, with the aim of bringing competition and innovation to the region’s equity index futures and options markets.

Initially, the offering was based on key Cboe Europe single country and pan-European indices, with clearing provided by Cboe Clear Europe. N.V.
 
From 6 November, CEDX plans to make single stock products available for trading with options offered on 133 companies across 12 European countries: Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland and the UK.

According to the business, these products amount to 70% of current ADV and open interest for the top 600 European equity options.

Speaking to the news, Jerome Bedouet, head of derivatives distribution EMEA at Morgan Stanley, said: “We look forward to partnering with CEDX on their expansion into equity options allowing our clients the benefit of greater liquidity and more choice.”

The post Cboe to offer single stock options from next month after backing from major participants appeared first on The TRADE.

Cboe Europe Derivatives (CEDX), the pan-European equity derivatives exchange of Cboe Global Markets, is expanding its product suite to include single stock options on leading European companies.

The new products should be available for trading by November 2023 and will be cleared by Cboe Clear Europe, subject to the necessary regulatory approvals. 

CEDX is initially planning to offer equity options on companies from 10 European countries (Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain and Sweden). Options on stocks from additional European countries are expected to be introduced from February 2024, subject to regulatory approvals.  

Read More – Creating a larger, more liquid European equity derivatives market 

“The addition of single stock options is a key component of our ultimate vision for CEDX and we believe it will accelerate the momentum behind our aim of creating the most complete pan-European equity derivatives ecosystem,” said Iouri Saroukhanov, head of European derivatives at Cboe Europe. 

Read More – Bloomberg equity derivatives specialist joins Cboe Global Markets as head of European derivatives

“We have received strong interest from participants in bringing these products to market, from both the institutional and retail communities, who share Cboe’s desire to expand access to derivatives more widely. We believe the combination of CEDX’s equity derivatives marketplace and Cboe Europe’s highly successful stock exchange – which is the region’s largest by market share – creates a powerful and unique proposition for participants wishing to gain exposure to pan-European equities in a transparent and cost-effective way. 

“As one of the leading US equity options marketplaces, this move also demonstrates Cboe’s ambition to become the leading global securities and derivatives trading network, by replicating its successful products and market constructs in new regions.” 

Read More – Cboe Derivatives Europe brings US market practices to the Bloc 

Like CEDX’s existing index derivatives, the new products are expected to clear into Cboe Clear Europe, a wholly-owned subsidiary of Cboe and the region’s largest cash equity clearing house.  

CEDX first launched in September 2021, initially offering trading in futures and options based on key Cboe Europe single country and pan-European indices. 

The post Cboe Europe Derivatives expands into single stock options appeared first on The TRADE.