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Screenshot of a breaking news alert e-mail from Q2 2017
Global capital market relief at the result of the first round of the French election prompted rallies in equity markets around Europe, while fixed income markets also saw sharp corrections. The moves provided the primary driver for strong increases in volumes in some of Eurex’ newest derivative products, with volatility derivatives being the standout performer.
Monday April 24th – the day after the French poll – set a new all-time peak, with 271,930 contracts traded at Eurex, Europe’s largest derivatives exchange that is part of Deutsche Börse Group.
In April, an average daily trading volume of 152,272 contracts in volatility derivatives registered an increase of 49.1% from March and 203.4% compared to April 2016. In March, volatility derivatives saw total volumes of 102,099 and 50,192 in April 2016. These numbers reflect the way in which a focus on investors’ evolving needs, allied with high-quality product engineering, has made Eurex a go-to venue – especially when markets turn turbulent.
Eurex CEO and Head of Derivatives Markets Trading at Deutsche Börse Group Thomas Book says volatility derivatives give investors a more accurate way of taking a position on the outlook for volatility in European equity markets.
VSTOXX derivatives are designed to suit the needs of a growing number of sophisticated investors who are seeking, not only volatility exposure, but also to benefit from the efficiencies of exchange trading and central clearing”, Book says.
EURO STOXX bank futures and options saw a particularly marked increase in activity and volumes, with average daily volumes (ADV) doubling those of 2016, reflecting particular nervousness among many investors in the sector. Options on the EURO STOXX Banks Index traded over 300,000 contracts a day (or nearly EUR 2 billion a day), triple the ADV seen in 2016. Open Interest in these products reached an all-time high at 7.25 million contracts and a total value of more than EUR 45 billion.