Interactive Brokers taps Cboe’s listed European derivatives offering

Rick Steves

“We are pleased to introduce access to CEDX, and give our clients an additional way to trade European derivatives alongside our existing global stocks, options, futures, currencies, bonds, funds and more from a single unified platform. With the addition of CEDX’s extensive European equity options and index derivatives, our clients now enjoy enhanced choice and flexibility, enabling them to manage their European investments more effectively.”

Interactive Brokers has joined the Cboe Europe Derivatives (CEDX) to provide its clients with access to CEDX’s range of equity index derivatives and equity options in the current quarter.

The brokerage firm has become a direct trading participant on CEDX and a direct clearing participant for equity derivatives on Cboe Clear Europe N.V.

CEDX covers futures, options, and equity options

Launched in September 2021, CEDX initially offered trading in futures and options based on key Cboe Europe single country and pan-European indices and recently expanded into equity options, further broadening its universe of these products during Q1 2024.

CEDX, designed to promote on-screen liquidity and delivering a single access point to pan-European equity derivatives products, now offers more than 300 options on companies from 14 countries (Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland and the UK). These products amount to more than 90% of current ADV and open interest for the top 600 European equity options, as of April 2024.

To align with client readiness to trade these products, CEDX initiated its first Liquidity Provider (LP) Programme for equity options on April 1, which also applies to its index options contracts.

Underlying stocks as collateral to reduce initial margin by 70%

Cboe Clear Europe N.V. allows 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 its estimates

Stock settlement (on options exercise and assignment) takes place in domestic Central Securities Depositories (CSDs), removing unnecessary costs and allowing for settlement netting with relevant cash equities transactions.

Iouri Saroukhanov, Head of European Derivatives, Cboe Europe, said: “We are thrilled to welcome Interactive Brokers to CEDX, which represents a significant milestone in the exchange’s journey to improve the ability of retail investors to gain access to and benefit from European derivatives, particularly options. Their participation demonstrates the need for more efficient European derivatives markets, which CEDX is helping to create by offering a simpler, lower cost, and pan-European approach to trading and clearing to lower barriers to entry for institutional and retail investors. Interactive Brokers has been a strong collaborator to our successful US options markets for many years, and we look forward to strengthening this collaboration with them in Europe to help improve and grow derivatives markets in the region.”

Milan Galik, Chief Executive Officer at Interactive Brokers, said: “We are pleased to introduce access to CEDX, and give our clients an additional way to trade European derivatives alongside our existing global stocks, options, futures, currencies, bonds, funds and more from a single unified platform. With the addition of CEDX’s extensive European equity options and index derivatives, our clients now enjoy enhanced choice and flexibility, enabling them to manage their European investments more effectively.”

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