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 percent from March and 203.4
percent 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
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”,
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.