Eurex launches daily options on EURO STOXX 50
“Particularly against the backdrop of increasingly volatile markets, Daily Options are another innovative solution for the professional market to efficiently manage exposures in a regulated and transparent market environment.”
Eurex has extended its diversified equity index product suite by listing Daily Options in which the trading in EURO STOXX 50 Index EoD Options (OEXP) will start as of 28 August 2023.
The new options will be offered with expirations in the next five trading days. Different from existing EURO STOXX 50 Index Options (OESX), the new contracts will be settled “end-of-day”.
“End-of-day” settlement will be based on the index closing price which is calculated at 17:30 CET compared to the intra-day expiry at 12:00 CET in the already listed OESX.
“Against the backdrop of increasingly volatile markets”
Daily expiring options allow investors to target exposures or hedge risk around specific events such as economic data releases or central bank meetings. The launch of daily options aims to address increasing institutional demand for options with short-term expiries as investors seek to react quickly and precisely to specific market events.
Randolf Roth, Member of the Eurex Executive Board, said: “Particularly against the backdrop of increasingly volatile markets, Daily Options are another innovative solution for the professional market to efficiently manage exposures in a regulated and transparent market environment.”
In addition to daily expirations, the new EURO STOXX 50 Index EoD Options (OEXP) will offer month-end expirations, which will be available for the next three consecutive months.
Eurex announced that four Liquidity Providers have committed to provide quotes for this new offering as of trading day one.
Eurex is an European index derivatives exchange offering nearly 400 listed index derivatives contracts, including the popular futures and options on EURO STOXX 50.
In July 2023, nearly 19 million EURO STOXX 50 Index Options contracts and more than 15 million EURO STOXX 50 Index Futures contracts were traded at Eurex.
Eurex to launch STIR derivatives
In June, Eurex announced plans to expand its Partnership Program to include short-term interest rate (STIR) derivatives as part of its efforts to enhance cross-product efficiencies while also supporting the European systemic stability and strategic autonomy agenda.
The new addition to the interest rate derivatives suite at Eurex creates an alternative liquidity pool for STIR derivatives to further support the EU’s systemic risk management and strategic autonomy agenda.
Euro STIR derivatives clearing has been identified by ESMA as being of substantial systemic importance for the EU’s financial stability. It, therefore, falls within the scope of measures proposed by the European Commission in December 2022 to reduce overreliance on certain third-country CCPs.
Eurex further enhances margin efficiency by combining an EU-based liquidity pool for STIR derivatives with its leading long-term interest rate (LTIR) derivatives segment and its OTC interest rate offering.
The Partnership Program aims to establish a viable alternative liquidity pool for trading and clearing EURIBOR Futures and Options within the EU. The comprehensive product offering includes Eurex’s LTIR segment, the clearing of OTC interest rate swaps as well as repo transactions.
The program also includes Three-Month Euro STR Futures referencing €STR, which was launched in January, established the new benchmark risk-free rate. The switch from the former short-term rate EONIA to €STR is part of the broader IBOR reform.
Eurex’s Three-Month Euro STR Futures are supported by a dedicated group of market makers providing pricing in the order book as well as a few banks providing off-book from the launch date.
The STIR Partnership Program as well as the re-launch of EURIBOR Futures and Options are planned to go live in Q4 2023.
