Announcing the 2013 Share and Quality Leaders in Institutional Flow Equity Derivatives

When it comes to flow equity derivatives, Goldman Sachs is the broker of choice for North American institutions and Morgan Stanley is the most widely used broker among European institutions.

New research from Greenwich Associates reveals that in each of these respective markets, Goldman Sachs and Morgan Stanley rank as either the leader or tied for the top spot in terms of penetration of the institutional market in all major flow equity derivatives products: options & volatility products and delta one products. 

Brokers in North America and Europe win institutional trading business in equity derivatives based largely on factors such as their pricing, their understanding of clients’ investment strategies or hedging needs, consistency of sales and trading service and their willingness to commit capital. “The common thread among the 2013 Greenwich Leaders in the flow equity derivatives business is that they excel in all of these critical areas,” says Greenwich Associates consultant Jay Bennett.

This year, Greenwich Associates interviewed 170 U.K. and Continental-domiciled institutions and 155 U.S. and Canada-based institutions that invest in equity derivatives. Respondents are asked to name the top 5–10 brokers they use for specific products and to rate the firms according to a series of qualitative factors in each product. Firms that receive quality ratings exceeding those of competitors by a statistically significant margin are named Greenwich Quality Leaders.

European Equity Derivatives
More than 60% of European institutions active in equity options and volatility products cite important trading relationships with Deutsche Bank, J.P. Morgan and Morgan Stanley. Fifty-five percent of institutions trading these products consider SG Equity Derivatives important and approximately half the institutions active in this market trade with UBS, Goldman Sachs and BNP Paribas. These firms are the 2013 Greenwich Share Leaders in Equity Options & Volatility Products. The 2013 Greenwich Quality Leaders in Equity Options & Volatility Product Coverage are BNP Paribas, Deutsche Bank, J.P. Morgan, Morgan Stanley, and SG Equity Derivatives.

Morgan Stanley also ranks first in market penetration among European institutions in equity swaps trading, followed by a group of brokers with roughly equivalent market penetration scores, including Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs, J.P. Morgan and UBS. These firms are the 2013 Greenwich Leaders in Equity Swaps. The 2013 Greenwich Quality Leaders in Equity Swaps Coverage are BNP Paribas and J.P. Morgan.

In terms of market penetration, Morgan Stanley, Goldman Sachs and J.P. Morgan led the equity futures market as important providers, followed by Deutsche Bank and UBS. These firms are the 2013 Greenwich Share Leaders in Futures.  Morgan Stanley and Deutsche Bank lead the ETF market with European institutional market penetration scores of 45–47% important relationships, followed by SG Equity Derivatives at 38%, and Citi, J.P. Morgan, UBS and Bank of America Merrill Lynch, all with penetration scores of 27–30%. These firms are the 2013 Greenwich Share Leaders in ETF Trading.

North American Equity Derivatives
Approximately 60% of North American institutions active in options and volatility products cite important trading relationships with Morgan Stanley, Bank of America Merrill Lynch and Goldman Sachs. About half these investors consider Citi, Barclays and Deutsche Bank important. These firms are the 2013 Greenwich Share Leaders in Equity Options & Volatility Products. The 2013 Greenwich Quality Leaders in in Equity Options & Volatility Product Coverage are Bank of America Merrill Lynch, Citi, Deutsche Bank, Goldman Sachs, and Morgan Stanley.

In equity swaps, Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch tie for the top spot in terms of penetration as important providers for North American institutions, followed by Credit Suisse, Citi, Deutsche Bank and J.P. Morgan, all of which tie for second place. These firms are the 2013 Greenwich Share Leaders in Equity Swaps. The 2013 Greenwich Quality Leaders in Equity Swaps Coverage are Goldman Sachs and J.P. Morgan.

Goldman Sachs leads as an important broker in the equity futures market with a 57% market penetration, among North American accounts, followed by Bank of America Merrill Lynch, Morgan Stanley and J.P. Morgan, all with market penetration scores of 36–40%, and Credit Suisse at 27%. These firms are the 2013 Greenwich Share Leaders in Futures. Goldman Sachs leads the ETF market with a 53% market penetration, among North American institutions, followed by Bank of America Merrill Lynch and Morgan Stanley with score of 42–45%, and then a next tier of brokers including Credit Suisse, Citi, Deutsche Bank and Barclays. These firms are the 2013 Greenwich Share Leaders in ETF Trading.