AMSTERDAM and LONDON, Oct. 18, 2023 - Cboe Global Markets Inc. (Cboe: CBOE) today announced it has secured commitment from of a broad range of participants to support the launch of single stock options on Cboe Europe Derivatives (CEDX), Cboe Europe B.V.'s pan-European equity derivatives exchange. CEDX expects to begin offering equity options from 6 November and plans to broaden its universe of available products by the end of Q1 2024, subject to regulatory approvals.
Firms that have committed to supporting CEDX's expansion into equity options include existing participants ABN AMRO Clearing, All Options, Barak Market Making B.V, Goldman Sachs, Morgan Stanley and Susquehanna International Securities. In addition, Interactive Brokers has also committed to connecting to CEDX to provide its clients with access to the suite of pan-European equity derivatives offered by the exchange, including single stock products. Interactive Brokers will become a direct trading participant on CEDX and a direct clearing participant for equity derivatives on Cboe Clear Europe N.V., Cboe's leading pan-European clearing house.
Iouri Saroukhanov, Head of European Derivatives, Cboe Europe, said: "We are delighted to have secured the support of such a strong group of participants to support the launch of single stock options on CEDX. Their support demonstrates the need for a more efficient options marketplace in Europe as envisioned by CEDX, which is designed from a pan-European point-of-view, increases competition and lowers barriers to entry for institutional and retail investors. CEDX will offer first class levels of efficiencies to options participants from a trading and clearing perspective, including margin efficiencies and domestic stock settlement on options exercise, to help grow options markets in Europe."
Milan Galik, Chief Executive Officer at Interactive Brokers, said: "We're thrilled to incorporate access to CEDX, which aligns with our dedication to offering clients an extensive range of global investment products. We applaud Cboe's roll-out of European equity derivatives and believe this move will stimulate more market activity, enriching the portfolio of investment opportunities for our clients."
Joe Nehorai, Co-Head, Global Listed Derivatives at Goldman Sachs, said: "We are delighted to expand our partnership with CEDX and support its single stock options launch, which aligns with our desire to help grow European options markets for our clients."
Conor McCann, European Head of Derivative Sales at Susquehanna International Securities Limited, said: "As a global trader of listed options, we are supportive of any initiative that helps to advance these markets, particularly in Europe where there is room to develop the market to meet the needs of the retail user. We are excited to become a liquidity provider in CEDX's equity options given the unique value proposition on offer, confidence in our ability to quote competitive prices and belief that there is genuine end-user demand for these products."
Jerome Bedouet, Head of Derivatives Distribution EMEA at Morgan Stanley, said: "We look forward to partnering with CEDX on their expansion into equity options allowing our clients the benefit of greater liquidity and more choice."
CEDX launched in September 2021, initially offering trading in futures and options based on key Cboe Europe single country and pan-European indices, with clearing provided by Cboe Clear Europe. N.V. The exchange has been designed to promote on-screen liquidity and offers a single access point to pan-European equity derivatives products, creating significant operational and capital efficiencies to participants.
CEDX expects to make single stock products available for trading from 6 November 2023, when it will offer options on 133 companies from 12 European countries (Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland and the UK). These products amount to 70% of current ADV and open interest for the top 600 European equity options. CEDX plans to broaden the available universe of underlying stocks in Q1 2024, subject to regulatory approvals, and plans to commence its Liquidity Provider Programme for all equity options after the March 2024 expiry period, aligning with readiness from a broad range of participants to trade these products.
Single stock options traded on CEDX will be cleared by Cboe Clear Europe N.V., which will permit the use of underlying stocks as collateral to provide offsets against matched equity option positions, delivering a potential initial margin reduction for a covered call position of around 70%, according to initial estimates by Cboe Clear Europe B.V. Furthermore, stock settlement (on options exercise and assignment) will take place in domestic Central Securities Depositories (CSDs), removing unnecessary costs and allowing for settlement netting with relevant cash equities transactions.
Additional information about CEDX's single stock products is available here.
About Cboe Global Markets Inc.
Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across North America, Europe and Asia Pacific. Above all, we are committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. To learn more about the Exchange for the World Stage, visit www.cboe.com.
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Certain information contained in this press release may constitute forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made and are subject to a number of risks and uncertainties.
SOURCE Cboe Global Markets, Inc.
