Interactive Brokers has joined Cboe Europe Derivatives (CEDX) as a trading and clearing participant, providing its clients with access to CEDX's suite of pan-European equity derivatives. The partnership aims to improve the ability of retail investors to access and benefit from European derivatives markets.

Interactive Brokers Joins Cboe Europe Derivatives as New Trading Participant

According to the press release, the new partnership will provide Interactive Brokers' clients access to CEDX's pan-European equity derivatives, including contracts on over 300 European companies, in the current quarter.

CEDX, Cboe's pan-European equity derivatives marketplace, was launched in September 2021 to improve the ability of retail investors to access and benefit from European derivatives. The exchange has streamlined the trading and clearing process by implementing a unified, cost-effective, and pan-European strategy, making it easier for institutional and retail investors to enter the market.

“Interactive Brokers has been a strong collaborator to our successful US options markets for many years, and we look forward to strengthening this collaboration with them in Europe to help improve and grow derivatives markets in the region,” Iouri Saroukhanov, Head of European Derivatives at Cboe Europe commented.

This marks another expansion of Interactive Brokers' derivatives offerings in Europe this month. Earlier, they introduced a new product designed to help both institutional and retail traders implement short-term trading strategies and manage their exposure to the French stock market. Known as Daily Options on the CAC 40 Index, this offering aims to provide traders with the necessary tools to engage effectively with global markets.

How CEDX Equity Options Work

Equity options at CEDX are cleared through Cboe Clear Europe N.V., enabling underlying stocks to be used as collateral and offering offsets for corresponding equity option positions. This arrangement can lead to a potential reduction in initial margins of approximately 70% for covered call positions.

“With the addition of CEDX's extensive European equity options and index derivatives, our clients now enjoy enhanced choice and flexibility, enabling them to manage their European investments more effectively,” commented Milan Galik, Chief Executive Officer at Interactive Brokers.

In November 2023, CEDX ventured into equity options and expanded its range in the first quarter 2024. Currently, it provides over 300 options on companies from 14 countries. As of April 2024, these products represent over 90% of the average daily volume (ADV) and open interest for the top 600 European equity options.

Moreover, stock settlement occurs in local Central Securities Depositories (CSDs), eliminating extra costs and facilitating settlement netting with corresponding cash equities transactions.

Last week, Interactive Brokers expanded its offerings on its platform in the United Kingdom by launching cryptocurrency trading. Meanwhile, an analysis by Finance Magnates revealed that Interactive Brokers significantly benefited from the surge in interest rates in the US in 2023.