Eurex introduces options on two EUR-denominated iShares fixed income ETFs

Dec 9th, 2019 | By | Category: Fixed Income

Eurex, the Deutsche Börse-operated derivatives exchange, has introduced options on two EUR-denominated fixed income ETFs issued by iShares.

Eurex introduces options on two EUR-denominated iShares fixed income ETFs

Lee Bartholomew, Head of Fixed Income ETD Product Design, Eurex

The two underlying ETFs – the iShares Core EUR Corporate Bond ETF (IEAC LN) and iShares EUR High Yield Corporate Bond ETF (IHYG LN) – are among the largest corporate bond ETFs in Europe, with €13.8bn and €7.5bn in assets under management, respectively.

They are also among the most liquid, in terms of traded volumes.

Options on these UCITS-compliant ETFs will offer investors additional tools to hedge or gain exposure to European investment-grade and high-yield credit.

Lee Bartholomew, Head of Fixed Income ETD Product Design at Eurex, said, “We are excited by this product launch as we feel that this is an ever-growing, important segment which we are committed to developing at Eurex. We believe we are well positioned to do this, giving clients access to a developing liquidity pool and offering a listed alternative that replicates OTC risk profiles.”

Brett Olson, Head of iShares Fixed Income ETFs (EMEA) at BlackRock, added, “We are seeing a virtuous cycle of demand for European bond ETFs developing as more investors become comfortable with the breadth and depth of liquidity in the market, and these options represent another critical milestone.

“It is the first time that investors will have access to options on Euro investment-grade and high-yield ETFs worldwide which provide access to a new tool that is more representative of cash bond markets for hedging risks and taking tactical positions.”

Eurex listed its first USD fixed income ETF options in 2017 based on the iShares J.P. Morgan $ EM Bond UCITS ETF (SEMB LN), iShares $ Corp Bond UCITS ETF (LQDE LN) and the iShares $ High Yield Corp Bond UCITS ETF (SHYU LN) products.

Volumes have grown impressively with over 200,000 option contracts on these ETFs traded year-to-date 2019, a fivefold increase versus 2018.

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