Back in 2009, the European and US options markets were a similar size – but the US market is now 30 times the size of the Europe’s. So what is it that the US has done that Europe hasn’t?
Experts at the International Derivatives Expo addressed this question and more during a panel discussion focused on The Future of Options in Europe. Panelists discussed the differences between the two, and what has kept the European market from growing at the same rate as it has across the pond.
The consensus was that the US market structure is more competitive and more accessible. In Europe, it can be more fragmented, costlier, and competition is restricted.
However it doesn’t just come down to fragmentation. Charlotte Alliot, head of financial derivatives, EQD & FI at Euronext, said exchanges in Europe need to be innovating to attract more investment.
The question of harmonization also came up – how can you explain to a non local investor that there are multiple expiry times? “Why is it all different, but the same stuff on four different exchanges?” said Iouri Saroukhanov, Head of European Derivatives, Cboe Global Markets.
Euronext is trying its best to harmonize across markets, but it’s not always easy. “There are improvements which can be made and you’re right, but we’re doing our maximum to harmonize,” said Alliot.