ANALYSIS: Education key to international retail expansion efforts
27th March, 2025|Radi Khasawneh
US exchanges and brokers are redoubling education efforts as they push to increase retail derivatives adoption outside their home market.
US exchanges like Cboe Global Markets and CME Group have said retail flow from Europe, the Middle East and Asia is becoming a driver of volume growth. Cboe's educational arm - The Options Institute - is supporting Cboe Europe Derivatives in running a comprehensive education campaign, announced in November following a survey of retail participants.
“An interesting finding from our retail client survey in Europe, and a key difference with the US market, is that exchanges are the most trusted entities in terms of education,” Catherine Clay (pictured) said. “That is an advantage we can lean into as we try to increase awareness and improve outcomes for retail traders in Europe."
The Options Institute has begun European local language educational campaigns, including in Russian and Spanish, with its first Dutch series starting next month. French and German programmes are planned for later this year. Speaking to FOW, the firm’s global head of derivatives said Cboe is prepping a similar push in Asia.
“We are excited to continue and scale those efforts that we started last year, and in parallel we are taking the same approach in the Asia Pacific region. We are in the middle of launching a retail survey in the countries we are focussed on, will follow up with focus groups and then next year we will go into the space in partnership with retail broker/dealers.”
The US options giant is also working with its retail broker network to customise education on their platforms as they look to access new regions.
“With The Options Institute, we have a curriculum at Cboe that has been developed over decades that is scalable into different languages and countries,” Clay added. “Therefore the education effort we are embarking on across regions is sustainable because it doesn’t take so much of a lift every time we go into a new jurisdiction. With that said, a big part of that offering is customisation. So, as we work with retail broker/dealers, the experience shows that they all want something suited to their user base or the instruments they think will attract demand. The benefit of these partnerships is that we become an extension of their education efforts.”
Robinhood opened its UK arm at the beginning of last year, joining IG Group and Interactive Brokers in the region.
“In the year we have been live in that market, we have continued to develop our offering,” JB Mackenzie, vice president and general manager of futures and international at Robinhood, said in an interview. “We recently added US equity and index options into the UK. With the fractional products, the 24-hour trading they have the full breadth of what you might call our traditional offering there.
“We see a lot of interest continuing to build from those clients, so we will be looking to expand the toolkit to match the US.”
A big part of the shift in thinking at both exchanges and retail brokers has been the technology available to traders now.
“Technology has acted as an accelerator and, with that process, firms like ours have been able to meaningfully reduce the cost to trade for those clients over the last decade,” Mackenzie said. “People are inherently interested in understanding more about these products, so the do-it-yourself model we have developed is just empowering them to do that and trade when they feel able to.
“What we have done is take the simple interface that we have in equities and options, and extended that to futures. You can make a decision, see the risk profile, set your dollar limits, in a very direct and intuitive way.”
That has reduced the barrier to entry for firms looking to diversify exposure across regions.
“Taking a wider view, markets around the world are becoming easier to access and at a certain point you will want to diversify your portfolio,” he added. “I do think over time you will see US investors interested in potential opportunities, that could be in Europe, the UK or Asia and our ultimate goal is to find a way to provide that seamless access.”
Cboe has seen US volumes rocket across its S&P 500 index (SPX), volatility index (VIX) and Russell 2000 options. The exchange group, which competes in US options with Intercontinental Exchange, Nasdaq and Miami International Holdings, reported record 2024 revenue of $2.1bn (£1.6bn), up 8% on 2023, driven by a fifth consecutive record year for US options trading.
At the end of last week, SPX average daily volume was 4.11 million contracts, exchange data shows, beating February’s full month record of 3.49 million lots, according to FOW data.
RJ O’Brien & Associates (RJO) is one of a number of global brokers watching listed retail products with interest.
“There are opportunities globally from a retail perspective and that is something that is becoming talked about a lot more,” Keith Riddoch, head of retail futures for North America at RJO, said in an interview. “As the exchanges tailor more of their products to meet that demand, that will grow. So as a firm with a global reach and an extensive client base, we can engage with that as the markets develop.”
