In 2002, almost as many equity and index options were traded in Europe as in the US. Europe had 12 markets, the US five. Now, the US market is three times as big as Europe’s. Many believe the difference is that while the US industry has moved with the times and become more competitive, Europe’s has changed little. As David Wigan reports, both the incumbents and new entrants want to innovate – but have to struggle with an entrenched structure of isolated exchanges.
Comparing the European equity options market to its US counterpart is a little like standing the ugly duckling next to its sibling the swan. While the latter has matured in recent years into a majestic beauty, the former remains shabbily inconspicuous and shy of anything that smells like deep water.
With US exchanges battling for market share, and initiatives such as...