Euronext launches total return future on Italian blue-chips

Euronext, which operates exchanges in various European countries including France, the Netherlands and Belgium, launched on Monday a total return future linked to the FTSE MIB, the main Italian blue-chip index.

Anthony Attia, global head of derivatives and post-trade at Euronext, said: “This new offering follows the successful migration of the Euronext financial derivatives markets to Euronext Clearing, paving the way for further innovation and the development of new products and solutions.”

Total return futures are an innovative exchange-traded version of the total return swap which have proved popular among hedge funds by replicating the performance of an index, including income, capital gains from dividends and overnight lending in the repo market.

Euronext launched its first TRF, based on the CAC 40, in November 2018, and now shares that market with Germany’s Eurex, which has TRFs based on Euro Stoxx, FTSE and MSCI indices, and ICE which has TRFs on FTSE and MSCI indices.

Euronext launched on September 9 its clearing house called Euronext Clearing after migrating its equities then derivatives books to the new clearing entity from incumbent LCH, citing the step as crucial to the group’s future product innovation.

Euronext has since launched on October 9 a raft of German single stock options, effectively completing the group's coverage of the constituents of German blue-chip index DAX, and the first US-Europe wheat spreads in partnership with CME on October 14.

Attia (pictured) added: “As part of our new strategic plan, “Innovate for Growth 2027”, announced in November, we will continue to seek opportunities in the European derivatives landscape, leveraging the full strength of our integrated pan-European model.”

Euronext chief executive Stéphane Boujnah outlined in mid-November the European exchange’s plan to expand in futures and options, citing various initiatives from the ambitious group.

Speaking as the European group detailed the “Innovate for Growth 2027” strategy, the chairman of the managing board and chief executive of Euronext said last month the launch in September of Euronext Clearing has opened up a brighter future for the group’s derivatives segment.

Boujnah, a former investment banker at Santander and Deutsche who became Euronext CEO in 2015, told FOW: “We have a strong derivatives business in selected geographies and various asset classes but we are not yet a large player in derivatives across the board. We want to become a bigger and more relevant player in derivatives in new asset classes where we are legitimate and in new geographies where we can offer a diversified competitive offering to clients."

The CAC 40 TRF had its best month in February last year when the future traded 84,500 lots, according to FOW Data, but volumes have been lower this year, with a 2024 monthly high of 44,500 lots in April, according to FOW Data.