Equity derivatives are increasingly being used as a substitute for actual shares in North America, according to a recent report by Greenwich Associates.
The study of the equity derivatives market, released in November, shows that a growing proportion of investors are experimenting with equity derivative “flow” products, such as listed single-stock and index options, vanilla OTC single stock and index options, and equity swaps, as a means of gaining exposure and taking positions and as a way to minimize trading costs.
The use of index futures, exchange traded funds, single-stock futures and equity swaps is also increasing.
Proportions
The proportion of institutions using single-stock options has risen from 68% in 2003 to 76% this year.
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