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Since the pandemic, investors have gone through a variety of unprecedented market moving events. Geopolitical turmoil, banking industry crisis, constant recession fears amidst high inflation and the Fed tightening cycle have all underscored the value of risk management in an era of uncertainty.

Hedging in real time and accessing a sufficient liquidity pool when it is needed have become more important than ever. CME Group offers deep liquidity across both E-mini equity index options and E-mini futures outside of traditional U.S. cash market hours, to help investors around the world respond to the market-moving events and news in their own time zones.

Actionable Liquidity Around the Clock

In many cases, investors in Asia and Europe have worldwide allocations of their assets. The substantial liquidity pool of U.S. equity index products in their time zones allows market participants to effectively manage unexpected market risk. For investors based in the U.S., having significant liquidity outside of cash hours provides an ability to hedge any overnight risk or take advantage of new opportunities when news breaks. 

For example, during the retail banking crisis in March, more than 686,000 E-mini S&P 500 options contracts were traded in non-U.S. trading hours (5 pm - 8 am central time) at CME Group as markets reacted to the news around Silicon Valley Bank and the emergency measures announced by U.S regulators overnight. Similarly, on the night that Russia invaded Ukraine in February 2022, nearly 560,000 E-mini S&P 500 options contracts traded before the U.S. cash equity market opened.

E-mini S&P 500 options average daily volume (ADV) during non-U.S. hours has grown more than 300% since 2017. The liquidity pool spanning from zero-day options out to five years on the curve does not disappear after the U.S. market close, and this continuity makes CME Group a unique place to trade listed S&P 500 options.

Buy-Side Use Cases

A fine grid of options expirations provides flexibility to structure trades to fit the need as required. This becomes more attractive when there is sufficient liquidity across the curve and round the clock. 

Non-U.S. hours volume at CME Group has significantly grown in recent years tracking approximately      16-18% of total volume. Below are four use cases of how some buy-side market participants could employ static or dynamic hedging strategies using E-mini S&P 500 options in their time zones.  

1. Rebalancing Portfolios

Portfolio managers in Europe and Asia often have a conditional rebalancing mandate for their global asset allocation, typically between equity and fixed income investments. If the ratio between the two departs from their desired mix, the managers will have to restore the ratio through rebalancing which can be tactically achieved by using E-mini S&P 500 options for the U.S. equity component. For instance, they may consider to write strangles –  selling call options at higher strike and selling put options at lower strike that have the same expiration – at any time of the day, either through Request for Quote (RFQ) or a bilaterally negotiated block at CME Group to minimize any slippage risk. 

2. Minimum Distribution Guarantees

Some pensions in Europe and Asia have a minimum distribution guarantee in their products. If this includes U.S. equities, they can run a dynamic hedging program with a tail risk overlay using E-mini S&P 500 options. They may also choose to execute a complex series of puts and calls, and execute any required delta hedging whenever the market moves, all of which can be easily accomplished by CME Group’s near 24-hour liquidity offering. 

3. Guaranteed Schemes

Insurance companies can also consider using options to manage a guaranteed scheme embedded in their products such as a variable annuity. They can  layer in options at any time of the day, rather than hedging with a linear product which only manages the delta. 

4. Structured Products

The strong non-U.S. hours liquidity plays a vital role to the large structured product market in Asia and in Europe, such as auto-callable notes. These notes typically help investors receive high yield if the underlying indices are above the coupon strike on any observation date, usually every 6 months, or receive the principal if the note is knocked out early or at maturity so long as the underlying indices have never touched the knock-in barrier. 

 They are highly popular in Japan (Uridashi) and Korea (ELS) providing an opportunity to retail and institutional investors to receive a high yield. The S&P 500 index is one of the major indices often employed in the note construction, alongside local benchmark equity indices such as Nikkei225 and KOSPI200. E-mini S&P 500 options are responding to the issuers’ needs with an unmatched liquidity pool, when the issuers seek to hedge their positions using the corresponding futures and options in their time zone. 

In today’s complex, highly uncertain yet interconnected global markets, the ability to manage risk in real time has become critically important. E-mini S&P 500 options, can help investors to tailor their investment strategies and effectively manage risk regardless of time zone.  

Read the full report on S&P 500 options trading outside U.S. hours.



OpenMarkets is an online magazine and blog focused on global markets and economic trends. It combines feature articles, news briefs and videos with contributions from leaders in business, finance and economics in an interactive forum designed to foster conversation around the issues and ideas shaping our industry.

All examples are hypothetical interpretations of situations and are used for explanation purposes only. The views expressed in OpenMarkets articles reflect solely those of their respective authors and not necessarily those of CME Group or its affiliated institutions. OpenMarkets and the information herein should not be considered investment advice or the results of actual market experience. Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade. BrokerTec Americas LLC (“BAL”) is a registered broker-dealer with the U.S. Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (www.FINRA.org), and is a member of the Securities Investor Protection Corporation (www.SIPC.org). BAL does not provide services to private or retail customers.. In the United Kingdom, BrokerTec Europe Limited is authorised and regulated by the Financial Conduct Authority. CME Amsterdam B.V. is regulated in the Netherlands by the Dutch Authority for the Financial Markets (AFM) (www.AFM.nl). CME Investment Firm B.V. is also incorporated in the Netherlands and regulated by the Dutch Authority for the Financial Markets (AFM), as well as the Central Bank of the Netherlands (DNB).

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