2011 Equity Derivative Market Trends — North America

This report provides a comprehensive look at the scope of the equity derivatives market and investor practices in North America. Topics covered include investment strategies used by institutional investors, flow, and structured equity and securitized product usage, concentration of equity derivatives trading, number of brokers used, commission information on futures and options, maturity mix of OTC equity derivatives, use of electronic trading, capital commitment requirements and more. This research is based on interviews with 185 respondents investing in equity derivatives in the United States and Canada between May and June, 2011.

Methodology: Greenwich conducted in-person interviews with 185 North American institutional investors using equity derivatives products. Topics covered include market trends and their relationships with their brokers. Interviews were conducted in the United States and Canada between May and June, 2011."

Keywords:

Investment Strategies, Equity Derivatives, Control, Trading, Sales, Coverage, Structure, Asset Classes, Type of Institution, Trade Execution, Selection Criteria, Flow Equity Derivatives, Exchange Traded Funds, Brokers, Derivatives Research, Reward, Cash, Current and Expected, Tri-Party Collateral, Equity Swaps, OTC Equity Derivative Trades, Delta One, Option, Volatility, Exposure, Underlying, Commissions Paid, Past 12 Months, Commission Spend, Concentration of Options Business, Likely Change, 2012, Volatility Products, Expectations, Large Index Options, Individual Single-Stock Options, Capital for Options, Notional Volume, Exchange-Traded Contracts, OTC Trades, Commission-Bearing Trades, DMA/Smart Order Routing, Electronic Trades, Execution Platform, Broker-Dealers, Futures Trades, Commissions Paid, Equity Swaps - Past 12 Months, Concentration of Equity Swaps Business, Change in Usage of Equity Swaps, Securitized Products, Structured OTC SHOW LESS READ MORE >

How Investment Strategies Primarily Utilize Equity Derivatives
Delta One Product Usage
Option and Volatility Product Usage
Likely Change in Usage of Equity Derivatives in 2012
Most Important Selection Criteria for Flow Equity Derivatives
Most Important Selection Criteria for ETF Trades
Most Important Selection Criteria for Electronic Trading Provider of Options and Futures
Proportion Using Flow Derivatives to Reward for Equity Derivatives Research
Relative Importance of Components of Equity Derivatives Research
Concentration of Options Business
Incidence of Use and Region of Underlying for Options Business
Range of Commission Spend on Options Trades
Requirement of Brokers to Commit Capital for Options Trading
Use of Commission Trades to Reward for Options Capital Commitment
Proportion of Options Trading Done via Exchange-Traded Contracts versus OTC Trades
Proportion of Options Trading Volume Done via DMA/Smart Order Routing Electronic Trades
Concentration of Futures Business
Range of Commission Spend on Futures Trades
Proportion of Futures Trading Volume Done via DMA/Smart Order Routing Electronic Trades
Concentration of ETF Business
Range of Commission Spend on ETF Trades
Proportion of ETF Trading Volume Done via DMA/Smart Order Routing Electronic Trades
Concentration of Equity Swaps Business
Incidence of Use and Region of Underlying for Equity Swaps Business
Range of Equity Swaps Volume
Proportion of Equity Swaps Trading Volume Done via DMA/Smart Order Routing Electronic Trades
Control of Equity Derivatives Trading
Preferred Sales Coverage Structure Across Products/Asset Classes
Preferred Trade Execution Structures for Sell-Side Brokers
Approach to Investing in Structured OTC Equity/Securitized Products
Structured OTC Equity/Securitized Products Usage
Concentration of Structured OTC Equity/Securitized Products Business
Range of Structured OTC Equity/Securitized Products
Current and Expected Use of Tri-Party Collateral Management for Equity Swaps or OTC Equity Derivative Trades

List of Tables

How Investment Strategies Primarily Utilize Equity Derivatives
Control of Equity Derivatives Trading
Preferred Sales Coverage Structure Across Products/Asset Classes, By Type of Institution
Preferred Trade Execution Structure Across Products/Asset Classes, By Type of Institution
Most Important Selection Criteria for Flow Equity Derivatives, by Type of Institution
Most Important Selection Criteria for Exchange Traded Funds, by Type of Institution
Use of Flow Equity Derivatives Business to Reward Brokers for Equity Derivatives Research
Relative Importance of Components of Equity Derivatives Research
Direct Flow Equity Derivatives Business with Specific Brokers to Explicitly Reward Them for Cash
Current and Expected Use of Tri-Party Collateral Management for Equity Swaps or OTC Equity Derivative Trades
Delta One Product Usage
Option and Volatility Product Usage
Average Number of Firms Used for Delta One Products
Average Number of Firms Used for Option & Volatility Products
Region of Underlying Exposure for Options Business
Reported Commissions Paid on Options Trades - Past 12 Months
Range of Commission Spend on Options Trades - Past 12 Months
Concentration of Options Business
Likely Change in Usage of Options in 2012
Likely Change in Usage of Other Volatility Products in 2012
Expectations to Do Large Index Options Trades in Next 12 Months
Expectations to Do Individual Single-Stock Options Trades in Next 12 Months
Requirement of Brokers to Commit Capital for Options Trading
Proportion of Options Trading Notional Volume Done via Exchange-Traded Contracts versus OTC Trades
Use of Commission-Bearing Trades to Reward Brokers for Capital Commitment on Options Trading
Proportion of Options Trading Volume Done via DMA/Smart Order Routing Electronic Trades
Execution Platform for Trading Options Permits Routing of Electronic Orders to Multiple Broker-Dealers
Reported Commissions Paid on Futures Trades - Past 12 Months
Range of Commission Spend on Futures Trades - Past 12 Months
Concentration of Futures Business
Proportion of Futures Trading Volume Done via DMA/Smart Order Routing Electronic Trades
Reported Commissions Paid on ETF Trades - Past 12 Months
Range of Commission Spend on ETF Trades - Past 12 Months
Concentration of ETFs Business
Likely Change in Usage of ETFs in 2012
Proportion of ETF Trading Volume Done via DMA/Smart Order Routing Electronic Trades
Most Important Selection Factors for Electronic Trading Providers of Options and Futures
Reported Notional Value of Equity Swaps Traded - Past 12 Months
Range of Notional Value Traded in Equity Swaps - Past 12 Months
Concentration of Equity Swaps Business
Likely Change in Usage of Equity Swaps in 2012
Region of Underlying Exposure for Equity Swaps
Proportion of Equity Swaps Volume Done via DMA/Smart Order Routing Electronic Trades
Most Important Selection Criteria for Structured OTC Equity/Securitized Products, By Type of Institution
Structured OTC Equity/Securitized Products Usage
Average Number of Firms Used for Structured OTC Equity/Securitized Products
Reported Notional Value of Structured OTC Equity/Securitized Products Traded - Past 12 Months
Range of Notional Value Traded in Structured OTC Equity/Securitized Products - Past 12 Months
Concentration of Structured OTC Equity/Securitized Products Business
Likely Change in Usage of Structured OTC/Securitized Equity Products in 2012
Approach to Investing in Structured OTC Equity/Securitized Products