Opalesque Industry Update - Melanion Capital, Paris, the first alternative manager to specialize in investment in dividend futures, has welcomed the announcement from Eurex of record volumes in the exchange’s dividend-based derivatives segment. According to Eurex, the world’s leading exchange offering dividend derivatives, September’s monthly trading was a record high of 989,000 contracts representing an extraordinary increase of 52 percent year-on-year. |
Dividend derivatives trading divides into indices and single stocks. During September, open interest in Eurex dividend indices grew to over 3.5 million contract and open interest in single stock dividend futures grew to some 1.6 million contracts helped by a spike in the volume of Vodaphone dividend futures changing hands as the Company announced the sale of its large stake in Verizon Wireless.
“Because they’re simple, easy to understand and answer investors’ needs to hedge their dividend exposure, dividend futures have become one of the few highly successful new contract segments launched by derivatives exchanges in the past few years,” said Jad Comair, Founder and Chief Invesment Officer of Melanion Capital. “The large volume increases we’re witnessing in the sector are good for our investors, not only because of an increase in liquidity but also because they will encourage further diversification as new exchanges enter the marketplace and new contracts are launched.”
Melanion Capital’s unique business model aims at capturing the opportunities in these derivatives while seeing them become the asset class of the next decade,” Comair concluded. “We firmly believe that Melanion Capital embodies a ‘first mover advantage’ in this sector and we look forward to being able to demonstrate our strengths and our ability to create alpha, on behalf of investors, in a wide range of market conditions.”