• Survey suggests strong interest in exchange-traded equity options from both current retail European derivatives investors and non-derivatives investors
• European retail investors’ primary motivations in options trading include capital protection and hedging
• Investors overall said they want more dependable financial and options education
• As part of Cboe’s ongoing efforts to unlock greater retail participation in options, The Options Institute – Cboe’s education arm – plans to expand its presence into Europe in early 2025

Cboe Global Markets, the world’s leading derivatives and securities exchange network, announced the results of its inaugural survey of European retail investors, conducted jointly by Cboe Europe Derivatives (CEDX), Cboe’s pan-European equity derivatives marketplace, and The Options Institute, Cboe’s education arm.

Overall, the survey reveals a strong interest among European retail investors in utilising exchange-traded options for risk management along with a clear need for education, highlighting an opportunity for the industry to address this demand. CEDX has been working with The Options Institute on ways to bring more awareness of financial markets and derivatives products to the European retail investor community and together plan to offer a comprehensive suite of educational resources in Europe from early 2025.

The survey aimed to gain insights into current retail investing preferences in Europe, attitudes towards options products and levels of interest in educational resources, to help inform The Options Institute’s delivery of services in the region and empower a new generation of investors. Conducted amid ongoing efforts by European policymakers to encourage more retail investment in the region’s capital markets, the survey results clearly indicate that exchange-traded equity options can play an important role in attracting greater retail participation.

Survey participants were segmented into three categories: current derivatives users; participants interested in derivatives but who do not currently trade them (derivatives prospects) and participants that do not have a desire to trade derivatives. Key findings of the survey include:

Derivatives Users:

• 62% are interested in trading options contracts with stocks/shares as the underlying;

• 61% said they would take an advanced course to learn more about options;
• 47% said that capital protection is their top strategy for options, followed by hedging (35%) and risk reversals (33%);
• 41% said they would seek education from exchanges.

Derivatives Prospects:

• 54% of those aware of options are interested in trading them with stocks/shares as the underlying, though 66% said that they would need more basic financial education before taking that interest any further;
• 64% said they wish they had more dependable sources of education around investing;
• 39% said they would seek education from exchanges;
• 61% said that understanding options trading strategies is the options topic they are most interested in learning about, followed by risk and portfolio management (53%) and options basics (45%).

Launched in 2021, CEDX is a pan-European derivatives marketplace and offers equity index derivatives and more than 320 equity options on leading companies from 14 European countries. CEDX’s mission is to grow European derivatives markets through a modern, efficient and pan-European ecosystem that lowers barriers to entry for institutional and retail investors. Earlier this year, Interactive Brokers joined the exchange as a participant and now provides its clients with access to CEDX’s range of offerings, representing a significant milestone on its journey to improve the ability of individual and institutional investors to access European derivatives, particularly options.

Iouri Saroukhanov, Head of European Derivatives, Cboe Europe, said: “Cboe has witnessed firsthand the growing influence of retail investors, especially in US options, and these survey results demonstrate European markets are on the cusp of transformation by this community if the significant demand that exists for exchange-traded options can be effectively unlocked. CEDX has been striving to lower traditional barriers to entry by creating a more efficient, simpler, and lower cost pan-European derivatives exchange. However, more needs to be done to cultivate an investing culture among European retail investors and provide the necessary resources for them to start trading. Therefore, we are thrilled that The Options Institute will offer educational courses to European retail investors starting early next year, helping to address the limited access these investors have had to direct options education compared to other regions.”

Alexandra Szakats, Head of The Options Institute at Cboe, said: “Access to meaningful and digestible education has played a pivotal role in the growth of options adoption in the US, particularly among retail investors. This survey demonstrates a tremendous opportunity for similar growth in European markets with Cboe being well-positioned to provide a wide set of educational resources that allow retail investors to make more informed decisions. The Options Institute is excited to expand into Europe, building upon its decades of worthwhile educational efforts through an array of content and resources. The insights from the survey and subsequent focus group discussions will inform our planned activities in the European market, helping retail investors better understand options and the utility they can provide to their portfolios.”

The Options Institute has been providing best-in-class investor education on the responsible use of options and trading strategies in the US for more than 35 years. The Options Institute will look to build upon its efforts in the US and will offer derivatives and financial education through on-line courses, on-demand offerings and an options knowledge center to European investors. Courses often feature speakers from The Options Institute’s Adjunct Faculty Program. Programming is available in English and Spanish with Dutch and German resources expected to launch in early 2025.

The European retail investor survey, and follow-up focus group discussions, were conducted between June and August of 2024. The participants included 5,058 retail traders across France, Germany, the Netherlands, Spain and the United Kingdom. More details on the survey and the results can be found here.

Source: Cboe