Novel SX5E/VSTOXX Contingent Finds Traction Among Investors As French Election Nears

​Hedge fund and institutional investors have entered into upside positions on the Euro STOXX 50 (SX5E) contingent on the VSTOXX April futures being higher than a certain level, the first trades of their kind. The VSTOXX April maturity reflects SX5E 1-month (April-May) forward volatility, which includes both rounds of the upcoming French Presidential Election. The contingent options also benefit from a significant discount in premium due to the negative correlation between spot and volatility.