Acuiti today publishes Optimising European Listed Derivatives Market Structure, in association with Cboe Europe Derivatives (CEDX). In this report, Acuiti examines European options markets and the reasons behind their relative lack of growth versus other developed markets over the last decade. The primary focus is the market structure of European single stock and index options, however, we also examine the futures markets to provide a holistic view of listed derivatives.
This report 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 firms.
The key findings of the report are:
- 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. On- screen exchange-trading would increase Europe’s attractiveness to external sources of flow, such as the US and APAC
- A lack of retail participation and Europe’s fragmented options markets were the two most-cited reasons behind the weak growth of European options
- 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
- One fifth of survey respondents expect a contraction in European listed equity derivatives markets over the next five years
Download the full report below.
