January 2019

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​The Delta One business is a type of market making for liquidity and risk management clients that seek economic exposure of a security without the complexity of carrying the underlyings. In this report, Finadium surveyed European Delta One desks on client behavior, market structure and opportunities for growth in 2019.

While Brexit and SFTR are broad-based themes on Delta One desks, other trends related to sourcing liquidity and technology buildouts have become more important to different desks at different times. Even Total Return Futures, a potentially compelling newer product, has not yet captured the attention of every desk. Our survey finds a disparity in not only how much effort desks have put into their infrastructure development, but also how much they are pushing for central clearing and their expectations of a healthy business environment in 2019. Our survey results provide details on the state of the Delta One business including the rationale behind trader thinking.

This report should be useful reading for Delta One desk heads, traders and product development leads as a peer comparison; for Delta One clients; and for associated business managers in prime brokerage, securities finance and equity trading.

Table of Contents

  • Executive Summary
  • The One to One Economic Relationship
  • Automation, Clearing and SFTR
    • – Top Desk Priorities
    • – Bilateral vs. Cleared
  • Sourcing Liquidity
    • – Competition and Cooperation
  • Profitability, Brexit and Business Drivers for 2019
    • – New Product and Client Directions
  • About the Authors
  • About Finadium LLC

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