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Cboe Global Markets believes that options markets in Europe are on the cusp of change as CEDX, its pan-European derivatives market, aims to make the region\u2019s options mainstream on the global stage.<\/p>\n
Iouri Saroukhanov, head of European derivatives at Cboe Global Markets oversees Cboe Europe Derivatives, and told Markets Media that the geopolitical scene is changing. There is more interest globally towards the European capital markets and the European Commission is helping to fuel that excitement though the Savings and Investments Union (SIU) initiative.<\/p>\n
Iouri Saroukhanov, Cboe<\/p>\n Saroukhanov said: \u201cAt CEDX, we want to make European options mainstream on the global stage, in the same way that Cboe made SPX options mainstream. The story for CEDX is about the growth of European derivatives markets overall, rather than taking market share, as a rising tide lifts all boats.\u201d<\/p>\n Cboe is looking at this as a long-term initiative, and five-year time periods as it builds out its strategies. One of these strategies is to increase retail participation to propel European options, as has happened in the U.S.<\/p>\n In a white paper published in June 2025<\/a>, Cboe described European options market as \u201cnotably stunted.\u201d Retail investors in the region have traditionally used contracts for difference, warrants\/turbos, and structured products\/certificates) which Cboe described as having potentially higher costs and risk profiles.<\/p>\n \u201cBeyond the direct utility of equity options to investors, well-functioning exchange-traded derivatives (ETDs) markets facilitate efficient price discovery and liquidity provision in underlying markets, and the central clearing of ETDs reduces counterparty credit risk and, in turn, systemic risk,\u201d added the white paper. \u201cRobust derivatives markets are also necessary to support the green transition and key to developing an investing culture.\u201d<\/p>\n Source: Cboe<\/p>\n Saroukhanov continued that Cboe\u2019s message is that options\u202fshould very much be part of the EU\u2019s Savings and Investment Union initiative, and that if the bloc wants to attract money towards the capital market it needs to give investors the tools to make that money efficient.<\/p>\n \u201cRegulators can help by looking at the various product wrappers and looking at the economic exposure of contracts, such as warrants and options,\u201d he added. \u201cIf that exposure is similar, then access should be similar.\u201d<\/p>\n In addition, the pricing of warrants compared to equivalent exchange-traded derivatives shows that the end-client is worse off, according to\u00a0Saroukhanov.<\/p>\n Market structure<\/strong><\/p>\n The white paper highlighted that CFDs, warrants, and structured products are significantly more diffuse and fragmented than ETDs and are not in a position to serve pan-European integration. Therefore, Cboe is encouraging policymakers to consider whether market structure reforms may be beneficial for single stock options.<\/p>\n For example, unlike equities, single stock options in Europe are not fungible across exchanges or clearing houses \u2013 a single stock option position cannot be opened on one exchange and closed on a different exchange even when the underlying stock is the same, which impacts the ability to create pan-European pool of liquidity.<\/p>\n \u201cFungibility could be achieved if policymakers reevaluated open access requirements for the clearing of single stock options and harmonised the contracts and\u00a0legal framework applicable to single stock option contracts traded on different exchanges,\u201d added Cboe.<\/p>\n Cboe also encourages policymakers to consider encouraging cross-margin agreements between EU CCPs clearing derivatives, which helps reduce margin for certain market participants, and to continue to evaluate capital requirements for market-makers and banks.<\/p>\n \u201cThe ability of market-makers to provide liquidity to European markets and the ability of banks to provide client-clearing services is greatly impacted by regulatory capital requirements applicable to those entities, and European markets cannot flourish without these services,\u201d added the white paper. \u201cMoreover, the systemic benefits of a diverse ecosystem of market participants cannot be overstated.\u201d<\/p>\n![\"\"](\"https:\/\/www.marketsmedia.com\/wp-content\/uploads\/2023\/03\/isaroukhanov-lg.png\")
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