Wednesday, November 7, 2018 Stamford, CT USA — The waiting game continues for equity derivatives brokers.
For the past several years, brokers have been waiting for a surge in volatility that revitalizes trading business in flow equity derivatives products. It’s true that 2018 has been a better year for the business than 2017, with listed options volume up some 20%. In fact, the volatility spike in the first half of the year had brokers thinking a rebound was at hand. The subsequent summer slowdown came as no surprise, and brokers remained relatively confident as they awaited the post-Labor day recovery. They’re still waiting—though October has raised hopes.
Nevertheless, the world’s biggest banks are maintaining their commitment to this important and potentially lucrative business. In this report, we identify those top dealers and present the list of 2018 Greenwich Share and Quality Leaders in Flow Equity Derivatives, including Equity Options & Volatility Products, Equity Swaps and Equity Futures, in Europe and North America.
Equity Options and Volatility Products
Institutional investors trading options and volatility products look for two primary things from a broker: capital commitments to help get trades done, and high-quality electronic execution. “As a result, the business is dominated by the largest banks that are willing to take on risk and have the resources to maintain sophisticated electronic platforms,” says Greenwich Associates Managing Director Jay Bennett.
In market penetration terms, Goldman Sachs is the clear leader in North America, followed by Bank of America Merrill Lynch and Citi. In Europe, J.P. Morgan has the biggest footprint among options investors, followed by Bank of America Merrill Lynch, Societe Generale and Morgan Stanley. These banks are the 2018 Greenwich Share Leaders in Options & Volatility Products. J.P. Morgan is the 2018 Greenwich Quality Leader in Options & Volatility Product Coverage in Europe. In North America, that title goes to Goldman Sachs.
J.P. Morgan, Morgan Stanley and Bank of America Merrill Lynch have the biggest market penetration scores in Europe. In North America, Goldman Sachs and J.P. Morgan top the market in penetration. These banks are the 2018 Greenwich Share Leaders in Equity Swaps. Goldman Sachs is the 2018 Greenwich Quality Leader in Equity Swaps Coverage in the United States. In Europe that title goes to J.P. Morgan.
Showing strength in overall execution capabilities, e-trading and clearing, Goldman Sachs and Morgan Stanley have achieved the biggest footprint among futures investors in North America, and J.P. Morgan, Bank of America Merrill Lynch, Goldman Sachs, and Morgan Stanley have the highest market penetration scores in Europe. These banks are the 2018 Greenwich Share Leaders in Equity Futures.
Click here for the list of 2018 Greenwich Leaders in Flow Equity Derivatives.