The Changing shape of derivatives markets

Disruption is shaping our industry at an unprecedented pace. Market structure is changing, and client needs and regulatory requirements as well. We all have to ask the right questions and find innovative answers. How do we react to changing investment behaviour? How can we respond to changes on the buy side? How can we meet the strong demand for sustainable investments? And how can we shape the derivatives markets of the future? Lots of open questions, and lots of challenges. But you will find that many of these were addressed by the experts we were proud to welcome to the various panels at this year’s Derivatives Forum in London.

The articles in this White Paper will show you that our industry is well prepared for upcoming challenges, and that many of these challenges have already been turned into promising opportunities.

Thomas Book, CEO, Eurex

White Paper

The global landscape - shaping the financial markets of the future

In the global political environment, we see tendencies to return to national markets, although markets are global. This creates challenges as well as opportunities. How does the financial market of the future look like? Where are the new hubs and what is their relevance today and in 10 years? How will the financial markets evolve post-Brexit and how will it affect euro clearing?

Take a walk on the buy side (access models)

Everyone benefits from more buy side participation, the buy side included. What are the key challenges that the buy side faces and what solutions are being offered? What products are most interesting from a trading and clearing perspective and how can the markets be optimized for attracting more buy-side participation? What value does a direct access model like ISA Direct add?

ESG Portfolio Integration - A deep dive into ESG investing

Incorporating ESG is undeniably becoming an integral part of portfolio management. What are the substantial elements of an ESG portfolio? Will there be a future where all products are ESG weighed? Or will ESG be just another factor in generating alpha? How can we make the G in ESG tradeable and will the future hold separate E, S and G products?

Volatility Investment Strategies, are there enough Risk Premia left? 

Market trends and outlook for quantitative volatility investments discussed by leading participants from asset managers that engage in different investment approaches and strategies. Are there enough risk premia left in markets? What relationship can be drawn from more complex corridor or knock out VarSwaps to the retail structured products markets and its risk profile?

Frontiers between on- and off-book markets

The central order book plays a pivotal role in exchange trading. It enables price discovery, provides transparency, builds confidence in a product’s liquidity and stimulates arbitrage and algorithmic trading opportunities. But, there are limitations to the order book. Will large or complex orders still be handled via phone-based block trades ten years from now? Can the order book further push the frontier between on- and off-book trading?