In a shot across the bow of its Frankfurt arch-rival, Euronext has launched mini German single stock options just two months after going live with its French and Dutch offerings.
Charlotte Alliot, head of financial derivatives at Euronext, told Global Trading, “It’s true that this is an attack on Eurex. They’ve been attacking us for a very long time on our home business, they have a significant market share on the French, Dutch, Italian equity options. We fight back where we can make the difference.”
Five of the instruments are now listed on the Euronext Amsterdam equity derivatives market, built on underlying German stocks of SAP, Siemens, Rheinmetall, Adidas and Allianz. So far, the trade has concentrated on SAP and Rheinmetall, Alliot reported.
Mini single stock options have 10 underlying shares per contract rather than the standard 100, and are designed to give retail investors greater exposure to higher-priced Euronext-listed stocks and facilitate the hedging of odd lots.
Euronext’s seven Dutch and French mini options launched on 12 May. The group has seen approximately 70,000 contracts traded since, and 30% retail participation.
With the German launch, Euronext is also targeting institutional clients.
“German equities tend to be quite high in nominal value, and they can be difficult to trade, even if you’re a small buy-side firm. With mini options, they are able to trade straight away as they do not have to wait to aggregate interest to reach an institutional size. They also give buy-side firms more granularity when they want to take exposure. It can be really convenient for smaller price cycles, but also for large institutionals to gain more granular exposure,” Alliot said.
“We’re bringing agility and flexibility, and making contracts more accessible to investors.”
In November last year, Euronext upped its competition with Eurex by completing its coverage of all DAX 40 index constituents in Germany
READ MORE: Euronext steps up Eurex competition with new stock options offering
With this latest launch, Alliot commented, “what I like about this mini options initiative is that it’s new. I’m glad that we’re bringing something different to the territory, coming at the competition from a different angle. If you’re attacking a liquidity pool and you don’t bring anything new, then it’s just a competition on pricing.”
