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2021 year in Review: The futures and options
Derivatives
2021 Year in Review
2021 – A year of sustained volatility
The futures and options markets remained volatile as exchanges reap the rewards from high demand for hedging instruments.
JANUARY
LSE closes ‘transformational’ Refinitiv deal The London Stock Exchange Group (LSEG) has completed its all-share acquisition of US data and tech provider Refinitiv from Thomson Reuters and Blackstone Group, describing the deal as “transformational”.
The $27bn (£19.7bn) deal will see LSEG sell off Borsa Italiana Group, including its Italian exchange and bond trading platform MTS, to meet European Commission antitrust conditions.
Goldman pulls plug on Trading Technologies takeover Goldman Sachs has abandoned talks with Trading Technologies International over a possible acquisition of the Chicago-based fintech firm for an estimated $500m (£370m), according to sources.
The US bank is said by sources to have dropped the takeover talks with the US tech firm in the past two weeks, less than a month after the same sources said in early December Goldman was in late-stage discussions to buy the firm though an agreement was not certain at that stage.
FEBRUARY
HKEX picks former JP Morgan banker as CEO Hong Kong Exchanges and Clearing has appointed former JP Morgan senior banker Nicolas Aguzin as its next chief executive officer.
The Hong Kong-based exchange said Aguzin will become chief executive on May 24 2021 for a fixed term of three years, subject to the approval of the Securities and Futures Commission.
MARCH
ICE’s first Middle East exchange opens Volumes at Intercontinental Exchange’s first exchange in the Middle East, Ice Futures Abu Dhabi (IFAD), reached 8,854 lots on the first day of trading.
“This is a good start,” IFAD’s president Jamal Oulhadj told Global Investor. “The first trading day was very exciting, beyond our expectations.
APRIL
Euronext closes Borsa Italiana deal for €4.4 billion Euronext has completed the acquisition of Borsa Italiana Group from the London Stock Exchange Group in a €4.4 billion (£3.2bn) deal that takes the group’s revenue over the €1 billion threshold, according to chief executive Stéphane Boujnah.
“On a pro forma basis we have now crossed the symbolic €1 billion revenue bar, with for 2020 total revenue a total amount of €1.4 billion approximately,” he said in a call to discuss the deal.
Cboe to launch European exchange on September 6 Cboe Global Markets said the European futures and options market it will launch in September has a “critical mass” of clients after three banks and six trading firms publicly backed the new exchange.
The Chicago-based group said it will launch Amsterdam-based Cboe Europe Derivatives, its first European derivatives market, on Monday September 6.
MAY
HKEX to remain “China-anchored” under new chief Aguzin The new chief executive of Hong Kong Exchanges and Clearing has offered his first thoughts on the future strategy of the Asian exchange, suggesting a continuation of the group’s existing approach including its strong links to China.
Nicolas Aguzin, who became head of HKEX, said: “It is still early days to comment definitively on thoughts around strategy, where we are going and where we should be but I can say in general I don’t anticipate a significant shift in our strategy around being China-anchored.”
JUNE
LME trading ring to reopen on September 6 The London Metal Exchange has said London’s last remaining open outcry trading floor will reopen in September, almost 18 months after it was closed due to Covid-19.
The LME announced the conclusions of a consultation with its members on the future market structure of the exchange, including the detail that the LME trading ring will reopen on September 6.
Marex cancels June listing due to ‘market conditions’ British broker Marex has cancelled its planned listing on the London Stock Exchange due to take place this month citing “challenging IPO market conditions”.
The broker issued a statement: “Despite broad investor interest from high quality institutions in the Marex business and prospects, the company has decided not to proceed with the IPO at this time due to more challenging IPO market conditions.”
JULY
ICE smashes records in US, UK carbon trading Intercontinental Exchange said it is seeing growing demand for its carbon products with its North American complex reaching record open interest and its UK carbon future having its busiest trading day in the past week.
ICE, which manages carbon auctions in the US, UK and Europe, said open interest in its North American complex, which comprises futures and options on various allowance schemes and certificates, hit a record of more than 1.1 million contracts on June 25.
Euronext eyes moving assets from LCH to CC&G - chief Boujnah The chief executive of Euronext has said his group is looking to move business away from its incumbent clearing house LCH to the Italian clearing house CC&G that Euronext acquired as part of Borsa Italiana in April. AUGUST
CME launches future based on BSBY index CME has launched a futures contract based on the controversial BSBY lending rate as Eurex has become the latest exchange to list mini versions of existing products aimed at retail investors.
CME launched a cash-settled future based on the 3-Month USD Bloomberg Short-Term Bank Yield Index.
SEPTEMBER
Cboe launches European derivatives exchange Cboe Global Markets has launched its first European futures and options market.
Amsterdam-based Cboe Europe Derivatives is offering futures and options based on six Cboe European indices. The venue is headed by Ade Cordell, president of Cboe NL.
LSE Group to close CurveGlobal in January The LSE Group has said its interest rate futures market CurveGlobal will close in January next year.
The UK exchange group said the European interest rate futures market, that has been offering free trading to clients for almost a year, will close in January 2022.
OCTOBER
Europe warns UK clearing equivalence may lapse European firms should prepare for a lapse of third party clearing equivalence for UK clearing houses, Ugo Bassi of the European Commission said.
Bassi, director of financial markets at the European Commission’s DG FISMA, warned European market participants not to assume that the UK’s temporary equivalence will be extended when the current period runs out, and that EU banks should prepare for higher capital charges for exposures to those clearing counterparties.
Cboe, SGX back Trading Technologies acquisition Cboe Global Markets and Singapore Exchange (SGX) are backing a consortium acquisition of Chicagobased fintech Trading Technologies.
The Chicago options market and SGX said they will be limited partners in the 7Ridge fund that is acquiring TT.
NOVEMBER
CME inks Google tie-up, secures $1bn stake CME Group has secured a $1 billion (£739.6 million) equity investment from Google as the exchange group unveiled a 10 year partnership to move its operations to Google Cloud.
The exchange group said it plans to start moving clearing, post-trade and market data services to Google Cloud next year, and then move its key markets to the cloud in a second phase after that.
DECEMBER
GH Financials CEO Phelps heads to RJO The group chief executive officer of exchange-traded derivatives firm G.H. Financials is moving to run the European arm of Chicago-based broker RJ O’Brien.
Mark Phelps will leave G.H. Financials after 10 years at the firm, having been appointed to his current role in March 2018. He will remain in post and assist with the leadership transition until his planned departure early in 2022.
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