Market briefing
April saw the continued rebound of broad equity markets and has now developed into a classic melt-up, crushing realized volatility with narrow daily trading ranges. That's not to say the market has been completely devoid of stories; the on-off Deutsche Bank / Commerzbank merger resulted in strong volumes for our EURO STOXX® Banks Futures with the respective Banks Options volumes more than doubling compared to the same period last year. Members have also been quick to build open interest in the new STOXX® Europe 600 ESG-X Futures. Here almost 40,000 contracts were recorded in April. The MSCI suite of derivatives continues to gather pace, this time it was MSCI France's turn to hit nearly 50,000 traded futures as members target the portfolio margin benefits of trading and clearing on Eurex.
Casting an eye on global equity markets, there has been a virtual 'unicorn stampede' to IPO several high-profile tech companies in the US: Lyft and Pinterest, to be followed soon by Airbnb, WeWork and Uber amongst several others. This picture is repeated in the red-hot tech scene in China right now despite vast accumulated losses as private companies. It is certainly noteworthy that some of the smartest VC minds in tech consider now is the right time to tap public equity markets. Perhaps they too adopted the mantra of "sell in May and go away". However, if you are more of a believer that the current trend remains intact, then Eurex provides the tools to hedge, or build, core equity positions. We have seen some of this activity already across our benchmark products throughout April with our EURO STOXX 50®, DAX®, SMI® and VSTOXX® derivatives all enjoying strong monthly volumes.
Looking ahead to May, we see the significant rollout of Eurex EnLight to all equity and equity index options. Members will now be able to access our selective RFQ platform, EnLight, to source block options liquidity. Here we anticipate strong liquidity provision from the registered responders keen to support order flow from the various requesting member firms. We look forward to members adopting and utilizing this additional channel and thus strengthen and broaden the liquidity pools across Eurex's equity and index options markets.
Zubin Ramdarshan, Head of Equity & Index Product Design, Eurex
Facts & figures
News
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Eurex EnLight, the selective RFQ platform, combines off-book liquidity with on-exchange efficiency. In May 2019, Eurex EnLight has been extended to include all equity and equity index options as well as corresponding futures available at Eurex. Randolf Roth, Member of the Executive Board, Eurex Frankfurt AG, explains the advantages of Eurex EnLight and further enhancements planned.
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