Eurex Reports Slump in European Equity Derivatives

The exchange reported growth in OTC Clearing, but the European equity derivatives contracts dropped 36% in 2020.

Eurex, an international derivatives exchange and a member of the Deutsche Börse Group, released its financial numbers for 2020 and the month of December. The exchange reported growth in the OTC Clearing segment as the notional outstanding volumes reached €16.6 trillion this year, compared to €12.9 trillion in 2019. European equity derivatives at Eurex took a major hit in 2020 as the traded contracts reached 273.8 million, which is down 36% from 425.2 million in 2019.

According to the released numbers, European interest rate derivatives were down 6% this year as the overall financial derivatives contracts dropped 4% in 2020, compared to the previous year. Despite the challenges in the financial derivatives market, Eurex reported a significant growth in OTC Clearing as average daily cleared volumes in 2020 spiked 18% to €122 billion, including a 33% jump in interest rate swaps.

Partnership Program of Eurex

The exchange outlined the significant contribution of its partnership program in the recent growth of the OTC Clearing segment.

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“Eurex’s Partnership Program continued its success story in 2020. In the OTC Clearing segment, notional outstanding volumes grew by 29%, up from 12.9 trillion EUR in 2019 to 16.6 trillion and average daily cleared volumes grew by 16% overall, up from 103 billion EUR in 2019 to 122 billion EUR in 2020. These volumes were driven to a substantial degree by the Partnership Program which offers participants the chance to share in the economics of OTC IRD clearing and have a say in the governance of Eurex Clearing. Portfolio switch activity also increased significantly throughout the year, while Eurex contracts continue to show a similar spread with no material basis compared to LCH,” Eurex mentioned in the official announcement.

“In the financial derivatives segment, a very strong Q1 was followed by more moderate trading activity across the rest of the year,” Eurex added.

Finance Magnates earlier reported about the weak derivatives demand at Eurex. The exchange recently made changes to its executive board as Michael Peters joined Eurex as CEO in July 2020.

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