CEDX Participant Spotlight: Susquehanna and Equity Options

Cboe Europe Derivatives (CEDX) recently extended its product set beyond index derivatives to include equity options, with options now available on over 300 companies from 14 different European countries.

CEDX’s offers a single access point to a pan-European product set and is leveraging Cboe’s US options leadership to promote deep and liquid on-screen markets in Europe. Our aim is to grow the European derivatives market overall, through the creation of a simpler, lower cost, pan-European ecosystem, which is attractive to both institutional and retail investors.

All CEDX products are cleared by Cboe Clear Europe, the leading pan-European clearing house, allowing participants to benefit from greater capital and operational efficiencies. These include a pan-European margin pool covering equity index derivatives and equity options and settlement at domestic CSDs on options exercise and assignment.

Susquehanna, a global quantitative trading firm, has been a liquidity provider in CEDX’s products since its launch in 2021 and is also supporting its newer equity options contracts. Cboe asked Robert Switzer, European Head of Derivative Sales at Susquehanna International Group, about the firm's participation on CEDX and its support of these new products.

 What were the reasons behind Susquehanna’s decision to support the launch of CEDX’s equity options marketplace?

As one of the largest traders of listed options globally, we are supportive of any initiative that helps to advance these markets, particularly in Europe where volumes have stagnated in recent years. Susquehanna has supported CEDX since its 2021 launch and is strongly aligned with its aim of developing more liquid, on-screen markets to help grow participation in European derivatives for the benefit of all investors. We are excited to be a liquidity provider in CEDX’s equity options given the unique value proposition on offer, confidence in our ability to quote competitive prices and belief that there is genuine end-user demand for these products.

What is unique about CEDX’s equity options offering and what benefits will it bring to investors?

CEDX’s equity option offering stands out due to its pan-European design, which provides a single access point for trading options on stocks from across Europe. This unique approach simplifies access for investors, allowing them to trade options on a wide range of European stocks through one platform, making the process more convenient and reducing costs associated with trading on multiple national exchanges.

Additionally, CEDX enhances market transparency by focusing on screen liquidity rather than over-the-counter (OTC) trading. This ensures fairer access for all types of investors, from retail to institutional, and attracts new participants, including those familiar with the liquid US options market. The integration within Cboe’s broader ecosystem further sets CEDX apart by reducing operational costs and improving capital efficiency in post-trade processes.

These benefits collectively create a more efficient, transparent, and accessible market for European equity options, ultimately enhancing participation and liquidity for the benefit of all investors.

As a market maker, what is Susquehanna’s role in supporting the launch and growth of these products?

Susquehanna has always been committed to working with exchanges to support product innovation and enhance competition in the marketplace. We take our role as a liquidity provider very seriously and are committed to providing competitive prices across the full range of CEDX’s equity options. This will ensure we’re offering consistent two-way pricing and liquidity throughout the day and in all market conditions. We believe a healthy, on-screen order book is key to the success of any product, bringing greater transparency and ensuring there’s a tradeable price available at all times.

How can Europe’s listed options markets reverse its decline in volumes and grow again?

Taking a step back, it is important to understand why European options volumes have remained depressed. The fragmented market structure and predominance of OTC trading has deterred new entrants and contributed to weak activity. That is something CEDX is addressing through its pan-European approach and promotion of on-screen trading.  We also think greater retail participation is key and we’ve seen the strong contribution they are making to derivatives volumes in the US. Their participation is a key factor in creating a vibrant, healthy and diversified marketplace. In addition to retail brokers offering them improved access to options, they also need to be better educated about what options products can offer them. Exchanges have important responsibilities in this regard and Cboe has certainly been taking a leading role, both historically in the US through Cboe’s Options Institute and through CEDX’s offering in Europe.

Learn more about CEDX equity options here.