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Cboe Europe Derivatives 2024 Recap and Look Ahead
Iouri Saroukhanov, Head of European Derivatives, recently sent a note to customers reflecting on Cboe Europe Derivatives' accomplishments in 2024 and a look ahead to 2025.
As we start the new year, I wanted to take the opportunity to recap the achievements of Cboe’s Global Derivatives business in 2024 and provide an update on what to expect from us in 2025, particularly from Cboe Europe Derivatives (CEDX).
In the US, Cboe enjoyed its fifth successive year of record options volumes, with an ADV of 14.95 million contracts across our four US options exchanges. Cboe’s proprietary index options complex, including S&P500 Index (SPX) options and Cboe Volatility Index (VIX) options, also set all-time high ADVs. As interest in options trading grew, we ramped up our advocacy and education activities in our ongoing effort to make options more accessible. A highlight in this regard was the launch of our US index options on Robinhood in October, greatly expanding retail access to these products.
We see a significant opportunity in 2025 to further expand access from global investors to our US derivatives products, to meet the rising demand for exposure to US markets and derivatives more generally.
The strength of Cboe’s Global Derivatives business has greatly benefited CEDX, which has been officially integrated into this business line for just over a year now. By more effectively leveraging our US options expertise, client relationships and educational resources, CEDX was able to achieve solid volume growth in 2024. Increased participation from both institutional and retail communities led to a record year for CEDX volumes, highlighting the growing enthusiasm for derivatives trading in Europe. We extend our gratitude for your continued support and are excited to build on this momentum, continuing our journey to creating a modern, vibrant pan-European equity derivatives marketplace that enhances the European derivatives market overall.
Here’s a deeper look at some of CEDX’s 2024 highlights...
Volumes: CEDX’s total volumes reached a record 105,095 during the year, a 123% increase on the 46,971 lots traded in 2023. Most of this growth came from our newer equity options products, with 78,783 lots traded during the year (see chart 1).
Volumes strengthened as the year progressed, culminating in Q4 with 33,764 lots traded—the highest quarterly volumes to date and a 117% increase from the 15,570 lots traded in Q4 2023. Other notable records included a monthly high of 18,975 lots traded in July, a single-day record of 3,766 lots traded on 27 November, and an open interest high of 24,044 on 19 December.
Chart 1 - CEDX Total Volumes Since Launch
Firm Participation: Participation continued to grow with the notable additions of both Interactive Brokers, which joined as a direct trading and clearing member, and IMC during the year. These milestones demonstrate the growing resonance of our model with both retail and institutional investors in Europe and beyond. The support of IMC, along with our existing options market makers including Susquehanna – which covers our full universe of products - and Morgan Stanley, has ensured we’ve seen strong levels of quoted prices across our entire range of equity options throughout the trading day.
Products: Having introduced our first set of equity options in November 2023, we expanded the range in Q1 2024. We now offer over 320 options on leading European companies from 14 countries, including being the first exchange to offer options on Galderma Group AG (GALDO). Over 90% of the top 600 European equity options’ ADV and Open Interest is concentrated in underlyings that CEDX selected for its listing.
Advocacy and Retail Education: Throughout the year, we engaged in various advocacy, educational, and marketing efforts to further promote and improve access to European listed derivatives. In April, we collaborated with Acuiti to publish research on how to improve European market structure, with a lack of retail participation cited as one of the reasons holding the region back. To help foster a European retail investing culture for options, we worked closely with The Options Institute, Cboe’s educational arm, to help bring its best-in-class investor education resources to Europe in 2024. In partnership with The Options Institue we also conducted a survey of European retail investors, revealing a strong appetite for options and a demand for reliable education. This survey will help to inform The Options Institute’s wider delivery of its services in Europe in 2025 and empower a new generation of investors.
..and CEDX’s plans for 2025
Participation and Product: As we look ahead to 2025, we remain committed to adding new participants and continue to have positive conversations with a diverse range of firms, including retail brokers, those managing institutional flow, and market makers.
We will also continue to review CEDX’s product set, collaborating with participants to prioritise their needs. We continue to closely monitor the successful adoption of shorter-dated products on Cboe’s US options exchanges and recent developments around these contracts in Europe. While CEDX’s product development is primarily driven by client demand, we are considering introducing weekly-expiring contracts on a select group of our single-stock options this year, subject to regulatory approvals.
Advocacy and Education: Our other key area of focus will again be on market advocacy and retail education to promote the many benefits that listed options offer to investors. The growing participation of retail investors in capital markets will continue to be a dominant theme and we anticipate Europe will make further progress in catching up with other developed markets in this area. Following our retail investor survey last year, we will continue to seek ways to build a retail investing culture in Europe. We will continue our collaboration with retail brokers and The Options Institute to offer educational resources to European investors throughout 2025, promoting the benefits of these products and enabling investors to make informed trading decisions.
As always, thank you for your continued support and we look forward to working closely with you during the rest of this year.