Institutions overtake retail structured product investors as dominant source of Japan equity option flow
The recent rise in Japan’s equity markets have seen macro hedge funds and asset managers overtake the retail structured product investors as the dominant source of flow on Nikkei and Topix options
The Japanese equity derivatives market has seen an influx of new money from institutional investors attracted to Japan as a result of quantitative easing measures undertaken by the Bank of Japan, in addition to a significant rolling over of existing money in the onshore retail structured product market after products were auto-called. The Nikkei 225 index has subsequently risen by 29% since the start of 2013 and over 53% in the past six months (see chart).
Traditionally, Japanese retail
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