ETF derivatives are growing in importance

In 2000, 20 years ago, trading in exchange traded funds began in Germany. But it was only with the development of options and futures on ETFs that investors were able to take advantage of the whole range of investment opportunities. Since then, the European ETF market has grown substantially. Eurex quickly recognized the potential and is now the largest provider of ETF derivatives in Europe. 

The offering covers the three main asset classes: equities, fixed-income securities and commodities. Futures and options on the successful iShares and db x-trackers ETFs are available for trading on the EURO STOXX50 Index, DAX, SMI, STOXX Europe 600, MSCI Europe, FSI 100 and S&P500.

One reason for the success is certainly the strong trend towards passive investment, as many market participants are now looking for new types of hedging instruments. Another important aspect is that ETFs, thanks to their flexibility, are increasingly used as building blocks in portfolios whose investment objective is to outperform the overall market - all passive core investments thus become part of an active investment strategy.

The ability to trade suitable options around a core investment is of crucial importance for many asset managers. Selling options allows investors to generate additional income from their cash positions, and in times of market stress these positions can be hedged with put options or even replaced with call options.

The wide range of instruments that can be accessed via Eurex ETF options makes it easy for all investors, whether large asset management companies or small private investors, to implement their strategies.

Eurex will continue to broaden the range of underlyers available in 2020 and moving into new areas such as US Government Bonds.