Cboe Europe Derivatives (CEDX) has confirmed that it is set to offer single stock options from next month, with equity options available from 6 November, having secured backing from a broad range of participants.
Following regulatory approvals, the available products are set to be expanded by the end of Q1 2024, and plans are in place to begin Cboe’s Liquidity Provider Programme for all equity options after the March 2024 expiry period.
The single stock options traded on CEDX will be cleared by Cboe Clear Europe N.V. In addition, stock settlement on options exercise and assignment will take place in domestic Central Securities Depositories, “removing unnecessary costs and allowing for settlement netting with relevant cash equities transactions,” according to the business.
Several firms have confirmed their support of CEDX’s expansion into equity options, including: ABN AMRO Clearing, All Options, Barak Market Making B.V, Goldman Sachs, Morgan Stanley, Susquehanna International Securities, and Interactive Brokers.
Interactive Brokers is set to become a direct trading participant on CEDX, as well as a direct clearing participant for equity derivatives on Cboe Clear Europe N.V.
Iouri Saroukhanov, head of European derivatives at Cboe Europe highlighted the importance of support from users: “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,” he added.
Cboe launched its equity derivatives exchange CEDX in September 2021, with the aim of bringing competition and innovation to the region’s equity index futures and options markets.
Initially, the offering was based on key Cboe Europe single country and pan-European indices, with clearing provided by Cboe Clear Europe. N.V.
From 6 November, CEDX plans to make single stock products available for trading with options offered on 133 companies across 12 European countries: Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland and the UK.
According to the business, these products amount to 70% of current ADV and open interest for the top 600 European equity options.
Speaking to the news, 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.”