Hedge funds and asset managers are going back to listed derivatives, and the question you might be asking is why—and, more importantly, how you should respond?

With tighter liquidity, higher funding costs, and more pressure on returns, listed products offer a way to hedge and gain exposure without taking on unnecessary counterparty risk. But they also come with their own set of operational challenges, especially as volumes rise and markets continue to move faster.

Here, we’re taking a look at what’s driving this trend and what you can do to support it inside your firm.

Liquidity and Transparency Wins

When markets inevitably get unpredictable, you’ll have more flexibility with listed derivatives. You’ll have the reassurance of knowing that you can get in and out of positions quickly, without having to strike a bilateral deal or worry about counterparty risk in the same way. And because trades are cleared through central counterparties, you can keep your credit exposure low.

Because pricing is public and settlement rules are standard, many asset managers feel more comfortable using listed contracts in volatile conditions. That confidence increases trading activity and helps you respond faster to macro changes.

Managing Costs Under Pressure

OTC derivatives come with higher costs, especially when you consider capital charges and collateral demands, which continue to rise. You’ll have an easier time controlling these costs with listed alternatives. Clearinghouses prevent you from needing complex documentation and credit checks between every counterparty, so you can keep your operations simpler and with less legal overhead.

This gets even more useful when you’re managing large portfolios or trading across multiple regions. Essentially, you get economies of scale without having to sacrifice flexibility.

A Word of Warning: Your Tech Needs to Keep Up

With listed derivatives being back in focus, you may find that your current tech stack is starting to show its limits. If you’re still having to do manual workarounds, this will slow down onboarding and risk checks, causing your teams to spend too much time chasing tasks that could easily be automated.

That’s why many funds are choosing to build custom platforms. A company like https://devexperts.com/, for example, builds tailored solutions for capital markets firms. You can get a platform that fits your workflows and gives you real-time visibility, so you’ve got what you need to manage risk properly.

Where This Is Headed

The listed derivatives trend isn’t a short-term reaction. Instead, we should look at it as part of a broader industry move towards transparency and standardisation. If you want to stay competitive, you need more than just access to the products—you need the right tools to use them at scale without taking on extra risk or dealing with avoidable compliance issues.

Building a custom solution with a specialist partner might be the logical next step you need to take, giving you the control and speed to confidently and proactively respond to this trend.