Santander Asset Management has expanded its listed FX derivatives business to Eurex, supported by Banco Santander and Deutsche Bank, as part of a growing trend towards centrally cleared FX futures and options.

Interest is clearly seen in the growth of Eurex's FX derivatives volumes, which have nearly tripled since 2020, with a 16% increase in Q1 2024 compared to Q1 2023.

Santander Asset Management Explores FX Options Trading at Eurex

The Spanish asset manager’s decision to trade and clear listed FX derivatives on Eurex highlights the increasing demand for centrally cleared FX futures and options. Market participants increasingly turn to these instruments to mitigate counterparty credit risk, navigate uncleared margin rules (UMR), and optimize capital costs.

By joining Eurex's FX ecosystem, Santander Asset Management aims to benefit from low exchange fees and regulatory certainty within the European Union.

"This is a great addition on our way to becoming the leading FX liquidity hub in Europe,” said Jens Quiram, the Global Head of FIC Derivatives and Repo Sales at Eurex.

Santander Asset Management's expansion plans extend beyond FX futures, as the firm also intends to establish an FX options business. In collaboration with Deutsche Bank, Santander Asset Management has already traded the first-ever FX options block trade on the exchange .

“In addition to our engagement in FX futures we actively collaborate with multiple FX dealers to explore the trading of FX options at Eurex,” Imanol Urquizu, the Head of Derivatives at Santander Asset Management, added. “Integrating FX futures and FX options within the Eurex ecosystem unlocks operational efficiencies and enhances our risk netting capabilities.”

Eurex's FX Derivatives Volumes Surge 16% in Q1 2024

Eurex's FX derivatives volumes have witnessed visible growth in recent years. In 2023, over 1.7 million contracts were traded on the exchange, nearly tripling the volume compared to 2020 when 600,000 contracts were traded. The first quarter of 2024 saw a 16% increase in traded contracts, reaching 586,000 compared to the same period in 2023.

“Trading FX on Eurex enables clients to benefit from the efficiencies of a listed derivatives market, and this is a prime example of how Deutsche Bank partners with clients and trading venues to provide liquidity and solutions in the evolving FX market,” Mario Muth, the Global Head of Platform and Listed Derivatives Sales and Head of Fixed Income Market Structure at Deutsche Bank, concluded.

Eurex's good performance was also confirmed in a report from earlier this year when the derivatives exchange showed its volumes for January 2024. They had grown by 6% compared to the previous year.

This year, Eurex also changed its Chief Executive Officer. At the end of January, Robbert Booij became the new CEO, replacing Michael Peters, who had held his position since July 2020 and plans to retire in September.