European Index Derivatives Markets Positioned to Support Trading Needs of Investors World-Wide Alongside Shifting Economic and Regulatory Environments, says TABB Group Study

NEW YORK and LONDON, Dec. 12, 2016 -- Financial regulations are driving market participants from an over the counter (OTC) market structure to an exchange-listed environment. As a result, these mandates are shaping where investors search for instruments to manage exposure. New research by TABB Group, “Eurex Derivatives Markets: Renewed Growth as Sector Demand Emerges," examines investors’ interest in trading European derivatives, with a particular focus on the growth in trading on Eurex’s STOXX Europe 600 (SXXP) and EURO STOXX (SXXE) sector indices. The research also examines use cases for these derivatives.

“Listed derivatives volumes in EMEA markets, especially in futures, have stayed strong amid volatility events resulting from Brexit, Italy’s December referendum on constitutional form, and other global regulatory mandates,” says report author Tom Lehrkinder. “Investors are increasingly gravitating to index products to manage portfolio exposure and futures products provide a natural fit. In fact, EMEA based stock-index futures volume is forecast to increase 17% from 2015 levels.”

According to TABB, Eurex has become the dominant venue in Europe within the stock-index derivatives market due to its focus on Pan-European equities and its traditional appeal to institutional buy-side clients. Trading on Eurex’s exchanges accounted for 77% of all European stock-index options volume and 52% of all stock-index futures volume in 2015. Traders have exchanged about $25.1 trillion Euros worth of derivatives on Eurex’s indices as of August 2016, with $15.5 trillion of the total representing stock-index futures and $9.6 trillion in stock-index options. 

The report explains that while many equity traders already utilize exchange-traded futures and options contracts on stock benchmarks tracking regions and countries, they are increasing their use of broader benchmarks and sub-indices targeting specific European industries.

“Build it and they will come is the motto for SXXP and SXXE sector indices,” says Lehrkinder. “The unique characteristics of the indices have allowed investors to rely on a consistent, rule-based selection and calculation methodology across countries and sectors.”

The report is available for download by TABB derivatives clients and pre-qualified media at https://research.tabbgroup.com/search/grid. For more information or to purchase the report, contact [email protected].  

About TABB Group
TABB Group is the international research and consulting firm focused exclusively on capital markets, founded on the interview-based research methodology developed by Larry Tabb. Since 2003, TABB Group has been helping business leaders gain a truer understanding of financial markets issues to develop actionable roadmaps and approaches to future growth. By accurately assessing their customer base, competition, and key market opportunities, TABB Group works with senior industry leaders to make critical decisions about their business. For more information, visit www.tabbgroup.com.

Contact:
Casey Sheets, TABB Group
+1 646-747-3207 / [email protected]