With all the attention focused on the battle for control of the Chicago Board of Trade, it’s easy to forget that European exchanges haven’t quite finished their own jostling for position on the global trading stage. In April, NYSE-Euronext completed its trans-Atlantic merger, while Deutsche Boerse put the finishing touches on its own restructuring, and top executives at both exchanges said they’d like to introduce products in the U.S. and Asian markets.
In the case of NYSE-Euronext, those products would likely be options trading on the Euronext.Liffe derivatives subsidiary. In the case of Deutsche Boerse, those products would likely be German and pan-European equity index products managed by its Eurex derivatives subsidiary and licensed to U.S. financial services firms, the exchange said in a written announcement. Van Eck Associates Corporation became the first U.S. company to take a license, and will introduce products based on Eurex’s DAXglobal Russia+ Index, which covers dollar-denominated securities on Russian companies.
Eurex also retains a 30% stake in the US Futures Exchange (USFE), but there have been no announcements regarding plans to list new European indexes there. The product targets for USFE are in the emerging binary options space.
Under the Deutsche Boerse restructuring, finalized at the end of May, Eurex boss Andreas Preuss not only has more autonomy to develop new products, but has control over the Market Data & Analytics division, which oversees the index business. This could free Eurex up for an innovation spurt while NYSE-Euronext struggles to define its lines of administration following the recent merger.
NYSE-Euronext and Deutsche Boerse are also prepared to go head-to-head in India, where NYSE-Euronext has a stake in the National Stock Exchange and Deutsche Boerse has a stake in the Bombay Stock Exchange.
Within Europe, Eurex has countered Euronext’s merger activities by taking its own organic growth to Euronext’s front door – most recently with sterling-denominated single-stock futures (SSFs). In fact, based on an early 2007 spike in volume, Eurex has become largest platform for SSFs and number two worldwide – largely because it long ago managed to list all components of the Eurostoxx 50.
With the new sterling-based products, Eurex offers more than 400 SSFs, in which trading volume more than doubled in the first quarter to 5.2 million contracts.