“The introduction of Cboe Europe Derivatives underscores our commitment to providing clients with an extensive range of products to enhance their trading strategies at low cost. As investors increasingly use derivatives to diversify and fine-tune market exposure, CEDX broadens the investment options available for our clients.”
Interactive Brokers has gone live with European stock options and European index futures and options through Cboe Europe Derivatives (CEDX).
IBKR clients will now have another means to trade European equity derivatives alongside a broad range of global financial instruments, including stocks, options, futures, currencies, bonds, funds, and more.
“Benefit from European derivatives, particularly options”
Interactive Brokers’ existing European equity derivatives offering – through Eurex and Euronext – will now be complemented with CEDX-listed derivatives to give clients an additional way to manage European investments.
The additional product suite consists of more than 300 stock options on leading European companies from 14 countries and European equity index derivatives. Futures and options contracts based on Cboe Europe single country and pan-European indices are available on well-known benchmarks, including Cboe Eurozone 50, Cboe Germany 40 and Cboe UK 100.
In addition, CEDX’s exchange, market data, and connectivity fees are waived until the end of 2024.
Milan Galik, Chief Executive Officer of Interactive Brokers, commented: “The introduction of Cboe Europe Derivatives underscores our commitment to providing clients with an extensive range of products to enhance their trading strategies at low cost. As investors increasingly use derivatives to diversify and fine-tune market exposure, CEDX broadens the investment options available for our clients.”
Iouri Saroukhanov, Head of European Derivatives, Cboe Europe, said: “We’re thrilled that clients of Interactive Brokers can now access Cboe Europe Derivatives’ suite of pan-European equity derivatives contracts. This is a significant milestone in CEDX’s journey to improve the ability of retail investors to gain access to and benefit from European derivatives, particularly options.”
Underlying stocks as collateral to reduce initial margin by 70%
FinanceFeeds first covered this news last month when IBKR reached a deal with CEDX. 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.
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 deliver 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.
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.
