This is excellent news for Europe’s income and value funds, which together manage more than 500 billion euros. These funds often hold large portfolios of dividend-paying or value stocks, and now portfolio managers can run call-overwriting strategies without the fear of their shares being called away at expiry. That means they can generate extra income on top of dividends, while at the same time improving risk-adjusted returns by reducing drawdowns. It’s a very practical use case where cash-settled options can make a real difference.

Imanol Urquizu, Head of Derivatives - Santander Asset Management

These cash-settled options are a real step forward for yield enhancement strategies in private banking. Traditionally, private bankers had to rely on over-the-counter structures, which meant complex account setups, collateral agreements, and higher costs with investment banks. By moving into a listed format, everything becomes much simpler — easier to open accounts, easier to manage from a compliance and transparency perspective, and far more efficient on collateral. At the same time, because these contracts are cash-settled, there’s no risk of ending up with shares at expiry. That makes yield enhancement strategies — put writing, call writing, or selling volatility spreads — much more straightforward for private bankers to implement, giving their clients cleaner access to premium income in a safer and more efficient way.

Imanol Urquizu, Head of Derivatives - Santander Asset Management

<div>Cash-settled options represent a significant step forward for private banking clients and investors seeking to generate additional returns or hedge risks efficiently. By eliminating the physical delivery of shares at expiration, they significantly simplify operational processes and reduce the complexity traditionally associated with these strategies.</div><div>This makes it easier to access tools that have historically been reserved for more sophisticated investors, enabling the implementation of strategies focused on premium income generation, risk hedging, and portfolio optimization.</div><div>As European-style options, they avoid the possibility of early exercise. Furthermore, trading on a regulated market provides transparency, security, liquidity, and efficiency, attributes that are particularly valued by retail investors.</div>

Victoria Castillo Sánchez, Head of Trading Desk - GVC Gaesco