Euronext has said buy-side firms are increasingly trading daily options in addition to the retail traders that have long-used these products as the European exchange group launched on Monday its latest daily options contract based on the French blue chip index.

Speaking as Euronext launched its CAC 40 daily option contract, Charlotte Alliot, the group's head of institutional derivatives, said fund managers like the flexibility of the shorter-dated products which offer a range of strikes.

“With the daily options trend growing out of the Netherlands across Europe and the US, it was a natural step for us to launch the CAC daily options but it has been nice to see interest from some of the big retail intermediaries.”

Alliot added: “It is not only retail however. I was pleasantly surprised when I spoke to the banks to hear they are seeing more and more interest from portfolio managers for short-dated options.”

Euronext was the first European group to launch daily options, on the Dutch blue chip index AEX in 2008, and this contract has thrived in recent years with trading volume up 18% last year to 4.4 million lots, according to the exchange.

Alliot said: “In AEX options, 25% of the volumes were from the dailies in 2023 and we hope to reach the same level one day with CAC.”

The CAC daily could also support the standard, monthly CAC options product, she said. “We expect people to trade the daily versus the monthly so we think the daily is also going to have a beneficial effect on the standard contract.”

The daily CAC options will also benefit from margin offsets against the established monthly and weekly CAC options, Alliot said, making the new products more attractive to high-volume options trading firms.

The product launch has been delivered at a time of change for Euronext which is migrating its clearing business from LCH to its own Euronext Clearing, with Euronext’s commodities and equity derivatives switching to the new clearing house by the third quarter of this year.

Euronext has said the insourcing of its clearing is important as that will allow the exchange to be more agile in product development and compete more effectively with larger rivals such as Germany’s Eurex.

Alliot said: “On the product development side, things will roll-out after the clearing migration. We want to deliver more new contracts and we are working on those at the moment. I can’t say anything yet but there are things that hopefully we can communicate in the coming months.”

Daily options have been one of the industry’s success stories in recent years based initially on demand from retail investors though they are being used increasingly by traditional asset managers.