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Access to options is more critical than when many of us started our careers. On an average day in 2024, the industry manages volumes that are roughly twentyfold a typical day at the turn of the century. Versus 2017, volumes have tripled. The catalysts are numerous. Fueled by technology, access and a broader understanding of this set of tools, the demand for optionality continues to grow.
Investors Set to Increase Hedgefund Equity Bets by Year-End
The SG CTA and SG Trend indices are nearing their 25th anniversary. While CTAs have been providing their services for much longer, the introduction of these indices in 2000 significantly boosted the recognition of CTAs as an investment style. Despite not being intended as benchmarks, they’ve effectively become leading performance benchmarks for both CTAs and (potential) investors. In today’s investment climate, this naturally leads to the question: Can’t we just buy the index?
Daily index option expirations have been around for over a decade. However, the widespread adoption of daily expirations coincided with the introduction of daily expirations in the S&P 500 (SPX) arena. This paper discusses Eurex’s EURO STOXX 50® index suite, the latest segment to introduce daily expiring options. To gauge how these options will be used, and how they could impact the EURO STOXX 50® ecosystem, we turn to the SPX option market.
Looking at the investment cycle through the lens of derivatives paints a rather fascinating picture. Following different risk parameters across asset classes and regions, we state that markets have almost reached the stage of maximum complacency.
Despite a few setbacks on the inflation front, the US economy continues to march along a path of benign conditions for risk assets and investment styles that typically flourish in low-vol, risk-on environments. However, navigating these seemingly favorable conditions requires a nuanced understanding of both the macroeconomic landscape and potential tail risks.