Equity Options at Eurex Exchange March 2019
Your benefits trading Eurex Equity Options One Stop Shop Weeklies & Euro- Style Eurex has the largest offer on single names: traded Options, Futures and Dividend products at one exchange Weeklies on all Eurostoxx components and European style options 3-11 Market Shares Eurex attracts more and more volume: trade where the liquidity is Eurex has 50% share in France, 24% in Italy, 25% in the Netherlands and 25% in Spain 12 Best execution Eurex offers tight spreads and low fees facilitating best execution. Over the past year we have seen liquidity moving on screen resulting in tighter spreads Savings Benefit from netting effects bundling your volume at one platform 13-20 Trade Entry Services & Multilateral Trade Reg. Trade Entry services are facilitated by a number of brokers TES trades can be registered by multiple counterparties 21-22 Flex Options & Vola Trades Flex Options: Define exercise price, expiration date, exercise style and settlement. Volatility Trades: Enter equity options delta-neutral strategies with an integrated cash leg 22 Lowest Fees We offer you low fees for client accounts and attractive volume and market making rebates up to 80% accross all country segments 23-28 2
Eurex Exchange Offers a Wide Range of Equity Options Eurex market participants are now able to trade Equity options on over 800 stocks, from 13 countries.* The range offers access to all the components of the EURO STOXX 50 and STOXX Europe 50 Index, as well as most components in the STOXX Europe 600, STOXX Europe Large 200, STOXX Europe Mid 200 and STOXX Europe Small 200 indices. Equity Options Underlying Country Index Components Covered No. of Equity Currency Options CHF Switzerland SMI, SLI, SMIM 121 EUR Germany DAX, MDAX, TecDAX 261 France CAC40 161 Netherlands AEX 60 Italy FTSE MIB 52 Spain IBEX 35 41 Belgium BEL 20 24 Austria ATX, ATX five 23 Finland OMX Helsinki 25 16 Ireland ISEQ 20 8 Sweden OMC Stockholm 30 1 GBP UK FTSE 100 32 USD Russia RDX USD 7 Total 807 * - Equity Options are not available for firms trading from the U.S. 3
Development Single Equity Options 1/2 Februar 19 Februar 18 YTM 2019 Traded Contracts 15.959.277 17.695.486 33.229.396 Agent 5.060.082 5.546.439 10.362.338 Principal 8.210.474 9.309.788 17.123.401 Market Maker 2.688.722 2.839.260 5.743.657 Open Interest 60.597.848 55.070.717 Average Daily Volume 2018 791.176 46% 54% Orderbook Off-Book Pie charts based on YTM 2019 data 4
Development Single Equity Options 2/2 Germany and Switzerland accounted >65% of the traded volume in January and February 2019. Country YTM 2019 YTM 2018 % change Germany 11.762.785 16.133.557-27% Switzerland 10.479.329 9.119.461 15% France 4.936.799 3.610.000 37% Netherlands 2.630.492 1.932.060 36% Finland 1.362.460 1.476.978-8% Italy 961.701 893.336 8% Spain 644.235 699.653-8% Belgium 156.994 172.373-9% Austria 38.555 47.361-19% Sweden 214.190 1.866 11379% Great Britan 24.245 28.733-16% Ireland 8.881 2.906 206% Russia 7.144 32.184-78% Total 33.227.810 34.150.468-3% Pie charts based on YTD 2019 data 5
Equity Options Country Segments Development 6
Equity Options Country Segments Development 7
Equity Options Country Segments Development 8
Product Variations Weekly Options and Europeans Weekly & European Style Options Weekly Options 67 Weekly equity options are available on Eurex: Weekly options expire every Friday Contract specifications are similar to the monthly options Advantages: Lower premiums Implement more targeted strategies, i.e..: tailor strategies around specific market events Wider choice of expiry dates Short-term investment in the underlying equity European Style Options European Style options are available on 34 equity underlyings The exercise style is the only difference between the American and European equity options contract specifications Advantages: Implement more targeted strategies Option can only be exercised at the end of it s life Remove uncertainty of executions during the options lifetime Cheaper than American options 9
Equity Options with weekly expiries Februar 19 Februar 18 YTM 2019 Traded Contracts 52.595 74.960 104.310 Agent 21.218 34.150 38.913 Principal 27.319 39.459 60.252 Market Maker 4.059 1.351 5.146 Open Interest 19.110 36.359 Average Daily Volume 2018 2.484 Pie charts based on YTM 2019 data 10
Benefit from Efficiencies Benefit from netting effects bundling your volume at one platform Bundle your volume at one platform With Eurex Clearing Prisma Portfolio ing, trading for example the EURO STOXX 50 future or Sector & Broadbased futures versus several options of its components, makes you benefit from netting effects The same applies to trading different country segments at one platform Mitigating risks through CCP clearing With Eurex Clearing, Europe s leading clearing house for securities and derivatives transactions, as the central counterparty to all trades, you benefit from mitigated counterparty risk Eurex Clearing provides effective CCP, risk management and collateral management services thus improving operational efficiency as well as market safety overall 11
Mixed Countries (Options) Trading Equity Options on one single platform instead of several platforms can result into large margin savings Migrate your French, Dutch, Italian and Spanish Equity Option trading to Eurex as a single platform to benefit a maximum of netting effects They will be netted versus other country groups such as German and Swiss Equity Options as well as our benchmark futures AAR 33,649 CAR 58,748 CSGN 230,540 ALV 252,265 56% savings Portfolio 252,266 Single s Portfolio ing Name Eurex Long Short P/C Exp. Date Exercise Price Initial (in EUR) Liquidity add on (in EUR) Total (in EUR) Portfolio Total (in EUR) savings Allianz ALV 100 0 C 2016/12/16 100 217,997 34,268 252,265 Credit Suisse ABN Amro CSGN 250 0 C 2016/12/16 15 208,219 22,321 230,540 AAR 0 230 C 2016/12/16 20 27,974 5,675 33,649 252,266 56% Carrefour CAR 0 350 C 2016/12/16 28 45,295 13,453 58,748 12
France vs. Germany (Options) Trading French and German Equity Options on one single platform instead of several platforms can result into large margin savings Migrate your French Equity Options to benefit a maximum of netting effects. The Eurex market share within French Equity Options is consistenly above 50% versus our competitors and you will find the same level of liquidity They will be netted versus other country groups such as German and Swiss Equity Options as well as our benchmark futures BMW 3,772 BAS 4,290 AXA 234,222 LOR 1,823,032 26% savings Portfolio 1,512,997 Single s Portfolio ing Name Eurex Long Short P/C Exp. Date Exercise Price Initial (in EUR) Liquidity add on (in EUR) Total (in EUR) Portfolio Total (in EUR) savings BASF BAS 1000 0 C 2016/12/16 80 3,677 613 4,290 AXA AXA 500 0 P 2016/12/16 30 229,071 5,151 234,222 BMW BMW 0 400 C 2016/12/16 100 3,770 2 3,772 1,512,997 26% L Oréal LOR 0 1400 P 2016/12/16 150 1,416,043 406,989 1,823,032 13
FESX vs. Dutch equity options Especially the Eurostoxx components are very interesting to have on Eurex in respect to the netting effects you would have against the futures contract This example shows the Dutch options where you do not only benefit from a significantly lower fee at Eurex, but also from a netting effect PHI1 23,460 UNI 24,935 INN 28,796 FESX 118,413 44% savings Portfolio 108,498 Single s Portfolio ing Name Eurex Long Short P/C Exercise Price SX5E Index Future Exp. Date Initial (in EUR) Liquidity add on (in EUR) Total (in EUR) FESX 50 0-2017/03/17 118,057 356 118,413 ING INN 0 100 C 13 2017/03/17 26,325 2,470 28,796 Philips PHI1 0 100 C 27 2017/03/17 20,643 2,817 23,460 Portfolio Total (in EUR) savings 108,498 44% Unilever UNI 0 100 C 37 2017/03/17 23,057 1,878 24,935 *Option Style: American 14
Liquid Options Trading liquid Equity Options on Eurex as a single platform results in netting effects They will be netted versus versus the highly liquid Eurostoxx or Eurostoxx Banks Future (example below) BNP 84,586 DBK 147,495 FESB 315,540 VO3 511,309 27% savings Portfolio 766,795 Single s Portfolio ing Name Eurex Long Short P/C Exp. Date Exercise Price Initial (in EUR) Liquidity add on (in EUR) Total (in EUR) Portfolio Total (in EUR) savings SX5E Banks Fut FESB 50 0-2016/12/16-240,211 75,329 315,540 VW VO3 500 0 P 2016/12/16 90 397,253 114,056 511,309 Deutsche Bank DBK 1000 0 P 2016/12/16 12 113,460 34,035 147,495 766,795 27% BNP Paribas BNP 1000 0 P 2016/12/16 40 62,969 21,597 84,586 15
Financial Institutions (Mixed Countries) Trading liquid Equity Options on banks with Eurex as a single platform results in netting effects They will be netted versus versus the highly liquid Eurostoxx Banks Future (example below) CRI5 61,301 FESB 74,799 BSD2 120,477 BPD 299,714 BNP 332,357 32% savings Portfolio 600,984 Single s Portfolio ing Name Eurex Long Short P/C Exp. Date Exercise Price Initial (in EUR) Liquidity add on (in EUR) Total (in EUR) Portfolio Total (in EUR) savings SX5E Banks Fut BNP Paribas FESB 50 0-2016/12/16-53,864 20,935 74,799 BNP 0 800 C 2016/12/16 50 280,885 51,472 332,357 Santander BSD2 1000 0 P 2016/12/16 4.5 84,479 35,968 120,477 600,984 32% UBI Banca BPD 600 0 C 2016/12/16 3.6 200,957 98,757 299,714 UniCredit CRI5 0 1000 P 2016/12/16 4 60,066 1,235 61,301 16
Automobiles (Italy & France) Trading liquid Equity Options on companies such as Fiat and Peugeot with Eurex as a single platform results in netting effects They will be netted versus versus the liquid Eurostoxx Automobiles Future (example below) PEU 84,586 FESA 147,495 57% savings FIA5 511,309 Portfolio 522,627 Single s Portfolio ing Name Eurex Long Short P/C Exp. Date Exercise Price Initial (in EUR) Liquidity add on (in EUR) Total (in EUR) Portfolio Total (in EUR) savings ES Autom.&P FESA 100 0-2016/12/16-260,241 17,874 278,115 Fiat FIA5 900 0 P 2016/12/16 8 535,075 206,703 741,778 522,627 57% Peugot PEU 800 0 P 2016/12/16 15 158,628 50,897 209,525 17
Contract Specifications Contract Size Price Quotation Tick Size Contract Months 1, 10, 100, 500, 1,000, 2,500 or 5,000 shares EUR**/CHF/USD: 0.01 GBP: 0.25 or 0.5 **Exceptions - Italian equity options: EUR 0.0005 - Bank of Ireland and Permanent TSB holdings : EUR0.001 Up to 12, 24 and 60 months: The three nearest successive calendar months, the three (for Spanish equity options nine) following quarterly months of the March, June, September and December cycle thereafter, and the four (for Spanish equity options the nearest) following semi-annual months of the June and December cycle thereafter, and the two following annual months of the December cycle thereafter. Daily Settlement Price Final Settlement Price The Daily Settlement Price is established by Eurex. The Daily Settlement Prices for equity options are determined through the binomial model according to Cox/Ross/Rubinstein. If necessary, dividend expectations, current interest rates or other payments are taken into consideration. American-style; an option can be exercised until the end of the Post-Trading Full Period (20:00 CET) on any trading day during the lifetime of the option. European-style for equity options with group ID DE 14, CH14, FI14, FR14 and NL14; an option can only be exercised on the Last Trading Day until the end of the Post-Trading Full Period (20:00 CET).European-style Russian equity options: an option can only be exercised on the Last Trading Day until the end of the Post-Trading Full Period (17:40 CET). Settlement Physical delivery of underlying shares is two exchange trading days after exercise: t+2 Last Trading Day Option Premium Trading Hours Third Friday of the respective month, for Italian equity options the day before the third Friday, of each expiration month, if this is an exchange day; otherwise, the exchange day immediately preceding that day. The premium is payable in full in the currency of the respective contract on the exchange day following the day of the trade. Orderbook: 09:00-17:30 CET; Swiss EO: 09:00-17:20 CET; Russian EO: 09:15-16:30 CET Eurex Trade Entry Services: 09:00-19:00 CET; Austrian EO: 09:15-19:00 CET; UK and Irish EO: 09:00-18:30 CET; Russian EO: 10:00-19:00 CET ( 16:30-17:00 CET on the Last Trading Day of Russian EO) The opening time of 09:00 is considered a reference point. Eurex opens its equity options staggered between 08:50-09:05 The closing time of 17.30 is considered a reference point. Eurex closes its equity options staggered between 17:30-17:36 18
Eurex Trade Entry Services Offers You Safety Participants can enter off-order book trades into the Eurex system, benefiting from the safety of clearing and settlement as well as the flexibility of off-book trades. Eurex Trade Entry Services Members are able to enter bilaterally agreed off-book transactions into the trading and clearing system. Registered off-book trades are then automatically cleared like regular exchange transactions The Eurex Trade Entry Services facility is fully electronic and integrated into members processes (Minimum number of contracts apply) Eurex Trade Entry Services Nondisclosure facility Block trades reaching or exceeding a certain number of contracts (defined by the exchange) are optionally not disclosed intraday. Thresholds are published on the Eurex website No Extra fee for non-publication On the following day, reports will contain updated volumes and open interest, including the ones that were not disclosed 19
and Flexibility Participants can enter off-order book trades into the Eurex system, benefiting from the safety of clearing and settlement as well as the flexibility of off-book trades Flexible Options Multilateral Trade Registration Allows customisation of equity options to suit the participant requirement Users can define Exercise price, Expiration date, Exercise style and Settlement type Flexible contracts are not disclosed intra-day. Members can enter an off-book transaction involving multiple counterparties with automated confirmation. Partial trades can be entered which can be assigned to counterparties. Block trade fee caps are applied to all partial trades. Fees apply only up to the fee cap, providing substantial cost efficiencies Eurex Vola Strategy Participants are able to enter equity options delta-neutral strategies trades with an integrated cash leg The facility provides Straight-through processing for all legs of a volatility strategy including the equity cash leg 20
Competitive & Transparent Fee Structure Trading and clearing covered by one fee Up to 80% fee rebates are available, depending on monthly proprietary trading volume, liquidity class and trade type Trade Entry Services (TES) fees apply to all transactions executed via the Eurex Block Trade facility and to flexible options Product currency Transaction fees Threshold Exercise fee Fee per lot Reduced fee* A-Account P-Account Fee per lot** Orderbook TES Orderbook TES (contracts) (contracts) EUR (European Equity Options) 0.10 0.10 0.05 0.05 0.10 EUR (German Equity Options) A- Account 0.15 0.15 0.08 0.08 0.15 EUR (German Equity Options) P/M- Account CHF A-Account CHF P/M-Account 0.10 0.10 0.05 0.05 0,10 1,000 500 0.20 0.20 0.10 0.10 0.20 0.15 0.15 0.08 0.08 GBP 0.15 0.15 0.08 0.08 0.15 USD 0.15 0.15 0.08 0.08 0.15 0.15 *Applies to contracts exceeding the threshold **No fees are charged for exercise of LEPOs 21
Fee Comparison for Netherlands: Client Accounts Trading Client orders on Eurex reduces cost by more than half for Dutch Options *based on publicly available information according to the TOM. Euronext and LCH website 22
Fee Comparison for Spain: Client Accounts Eurex is always cheaper, especially for small orders. Otherwise you can save half your trading costs trading on Eurex E.g. a 2000 lot trade costs you 400 on MEFF and only 150 on Eurex enlarged *based on publicly available information according to the MEFF website 23
Fee Comparison for Italy: Client Accounts Eurex is always cheaper *based on publicly available information according to the IDEM website 24
Fee Comparison for France: Client Accounts There is a small difference up to 1000 lot orders, then Eurex is cheapest up to 3000 / 4000 lot trades Eurex offers free non-publication from different thresholds onwards 25
Fee Comparison for UK: Client Accounts 26
Further information For full equity option product list, contracts specifications and parameters (including Group ID): http:///exchange-en/products/equ/opt/ http:///blob/272096/9517af6c9d2eeb05dffe9580fecfcc62/data/productlist.csv Corporate action announcements: http:///exchange-en/products/equ/corporate-actions Eurex Trade Entry Services: http:///exchange-en/products/product-information http:///blob/3229076/ec9c82bd2d33f626283b02ba48ceca62/data/tradeentrys erviceparameters.zip Market Making : http:///exchange-en/trading/market-making-and-liquidity-provisioning Broker & Market Makers: http:///exchange-en/resources/participant-list/ Trading Fees: http:///exchange-en/trading/transaction-fees 27
Further information Contact us Sales Germany, Benelux & France Paul Beck Deutsche Börse Group Clearstream International Lux The Square 42, Avenue JF Kennedy L-1855 Luxembourg T:+352 2 43-3 61 42 paul.beck@deutsche-boerse.com Sales Switzerland & Italy Philipp Schultze Eurex Global Derivatives AG Theilerstrasse 1a 6300 Zug Switzerland T: +41 43 4 30-71 25 vincenzo.zinna@eurexchange.com Achim Karle Eurex Frankfurt AG Germany, Representative Office Mergenthalerallee 61 65760 Eschborn T: +49 69 2 11-1 87 57 achim.karle@eurexchange.com Nicolas Kageneck Paris, Representative Office 17 Rue de Surène 75008 Paris France T: +33 1 5 52 76-7 76 nicolas.kageneck@deutsche-boerse.com Trading T: +49 69 211-1 12 10 Eurex Functional Helpdesks Clearing T: +49 69 211-1 12 50 Eurex Technical Helpdesk Technical T: +49 69 211-1 12 00 28
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