The Options Industry Council today shared the results of the study, "Analysis on Structured Products and Listed Equity Options in Europe: An Industry Overview and Future Prospects," conducted by Structured Retail Products , which profiles recent trends in the European structured product market. The report showed many common structured products can be replicated using listed options and that while the outlook includes rising structured product volumes in Europe, their issuances were expected to move to a listed environment.
The SRP study showed an estimated 15-30% of structured products are hedged on listed equity option exchanges. The current market environment offers opportunities to increase this percentage as listed markets offer greater transparency, better liquidity, lower costs and the ability to mitigate risk. The study also found that structured product design and interest has moved away from currency and interest rate hedging and toward equity risk mitigation with equities accounting for more than 80% of structured product volume.
"Providing insight into the European structured product market, the SRP Report identified the importance of listed markets for hedging structured products, underscoring the importance of continued education about exchange-listed options among European market participants," said Mary Savoie, Executive Director of OIC. "Furthermore, it highlights the opportunity for OIC to increase the awareness of the benefits and risks of exchange-listed options with a global audience, thus promoting further growth of the options markets."
StructuredRetailProducts.com is a research firm that is part of the Euromoney group which provides intelligence for the global structured products industry. The firm interviewed 75 respondents from its user database between December 2014 and January 2015 with the sample comprised of industry professionals with roles directly or indirectly related to structured products, drawn from asset managers, commercial banks, insurers, investment banks, post banks, regulators, securities houses and technology firms. Additionally, the survey included some open-ended questions, to capture more in-depth insights on a voluntary basis.
About OIC - The Options Industry Council is an industry cooperative funded by the U.S. options exchanges and OCC, the world's largest equity derivatives clearing organization and sole central clearing house for U.S. listed options. OIC's mission is to provide free and unbiased education to investors and financial advisors about the benefits and risks of exchange-traded equity options. Managed by OCC, OIC delivers its education through the Options Education Program, a structured platform offering live seminars, self-directed online courses, mobile tools, podcasts, webinars and live help. OIC's resources can be accessed online at OptionsEducation.org, via mobile app for iOS, or by phone at 1-888-OPTIONS.