Building liquidity in Europe’s volatility markets

How have volatility markets developed in 2026, both in terms of participation and the products that traders are using?

Matthew Koren: Eurex has the majority market share in European equity index and single stock volatility. On the index side, the majority of our volume is still concentrated in EURO STOXX 50®. However, we are also seeing growing participation in STOXX® Europe 600, for which index options (OXXP) volume grew by 29.39 percent year-on-year as of July. The latter is a more broadly defined index, with greater geographical diversification and more constituents, which makes it attractive to certain market participants.

Our offering spans OESX and OEXP, our end-of-day-settled EURO STOXX 50® options contracts, which include the 0DTE contract, as well as ODAX, our DAX® index options contract. We also have a comprehensive MSCI derivatives suite and the largest single stock options ecosystem in Europe, with more than 650 listed single stock options. VSTOXX® is our volatility index product.

In 2026, a major focus for us has been building liquidity across markets. U.S. and European options markets have historically had different liquidity profiles, particularly in the visible order book.

One of the biggest changes we implemented in 2025 was introducing a new liquidity framework for OESX. Rather than Eurex determining how wide liquidity providers should quote and how many contracts they need to show, the emphasis is now on the amount of time they are present in the market and how competitive they are when in it. It is up to the market to determine market behavior and how wide liquidity providers should be quoting.

That has delivered encouraging results. Spreads have tightened by around 25 percent to 35 percent; the number of strikes being quoted has increased by 50 percent, with a much better picture, especially in out-of-the-money options, and we have also seen increased end-client activity. We rolled the framework out to OEXP in January and began testing a similar approach for single stock options in September, ahead of its launch in November.

On the back of significant improvements seen in EURO STOXX Index Options liquidity, Eurex has turned its sights on rolling out a similar program in equity options. Deep visible liquidity across the entire European volatility ecosystem has been on the wish list of many volatility traders, especially those focused on dispersion.

Matthew Koren

Sales Americas, Eurex

Alongside liquidity, how are you working to make European volatility markets easier to access?

Matthew Koren: Sponsored access is an area that we have been very focused on. It enables firms to access the exchange directly without becoming full members, and we are starting to see some of the larger hedge funds become involved through this route.

Eurex EnLight has also been an important initiative. It is our selective RFQ platform that enables participants to request quotes from multiple liquidity providers, interact with those quotes, and benefit from straight-through processing. You control information distribution, capture price improvement, and benefit from immediate on-exchange straight-through clearing without the need to set up bilateral arrangements with the liquidity providers (LPs) you want to interact with, since the negotiation and execution take place in the exchange and CCP environment. We saw our first end-client trades on Eurex EnLight in late spring, and volumes are up around 108 percent year on year, with a significant amount of that activity coming from volatility trading across EURO STOXX 50® and single stocks. We have also made changes to our FLEX options. Buffer ETFs have become a major area of growth in the U.S., but historically one barrier to developing that market in Europe was minimum block trade sizes. Following regulatory changes, we reduced the minimum block trade size to one lot for OEXP in July and for most of our single stock options in May. We saw activity come through very quickly after those changes, including interest in OEXP FLEX from a large ETF issuer.

A lot of the work is therefore about removing barriers that have historically made European markets more challenging to access.

How is demand for shorter-dated options changing the market?

Matthew Koren: There has definitely been a shift towards shorter-dated trading, and OEXP is a good example of that.

Until January, we listed the first five consecutive trading days. The market told us it wanted more, so we expanded that to the first 10 consecutive trading days, as well as introducing the first 13 month-end contracts.

We are seeing that demand elsewhere as well. We recently introduced weekly options across three MSCI contracts. More broadly, the traditional concentration around monthly expiries is beginning to give way to greater demand for shorter-dated exposures.

This follows a trend that has already developed significantly in the U.S. We expect to see more of that behavior make its way into European markets as liquidity and the range of available expiries continue to develop.

What does the liquidity profile of European volatility markets look like in 2026, and how could that influence participation?

Matthew Koren: The vast majority of index trading remains concentrated in EURO STOXX 50®, through OESX and OEXP. However, activity in DAX® has also become significant, and STOXX® Europe 600 trading is also growing.

Where trades take place also varies considerably depending on maturity. OEXP interest is shorter-dated, and around 89 percent to 90 percent of that activity takes place in the order book. For longer-dated OESX contracts, the balance is different, with roughly 60 percent traded as blocks and 40 percent through the order book.

As visible liquidity continues to improve, we think more volume can move towards the order book, although that will take time.

Over the next six months, one of Eurex's main priorities is improving liquidity in single stock contracts. Improving visible liquidity in this segment could make it easier to scale strategies that are already well established in the U.S., including dispersion.

Better screen liquidity could therefore help attract more institutional strategies into Europe, but there is also a retail element to consider. Europe has less structural demand for retail options and, consequently, does not have the same level of participation as the U.S. Improving visible liquidity, access, and the availability of more affordable market data are all parts of making those markets more accessible to retail investors.

How can investors use volatility markets to position around major political and economic events, such as the U.S. midterms?

Matthew Koren: One of the biggest recent market changes is that investors increasingly have access in Europe to many of the same tools and liquidity profiles they are accustomed to in the U.S.

OEXP is a good example. Volumes are up around 42 percent year-on-year, following strong growth in previous years. That reflects the broader shift towards shorter-dated trading.

Investors no longer necessarily need to trade a six-month option to hedge an event such as the U.S. midterms. They can potentially put that hedge on much closer to the event and target the economic exposure more precisely.

For an event like the midterms, I would expect activity across VSTOXX®, including potentially VIX® versus VSTOXX® spread trading, as well as investors hedging European risk directly. Outside of VSTOXX®, shorter-dated OEXP is likely to play an increasingly important role, alongside some OESX activity.

That ability to target individual events more precisely is one of the reasons shorter-dated volatility products are becoming increasingly important.