Global Derivative Markets

Global Derivative Markets Reached Record Levels in 2019

FIATrading volume is at record levels in options and futures, according to data compiled by an industry trade group. 

The Futures Industry Association (FIA) is a trade association of futures commission merchants or those who earn commissions on futures trades. 

Will Acworth is the Senior Vice President of FIA, and he hosted the most recent FIA webinar entitled “Annual Trends in Futures and Options Trading”

In the webinar, Acworth discussed data the FIA released on January 16, 2020, which can be found here.

The data found that 2019 

”Summary statistics released today by FIA show that trading activity in the global exchange-traded derivatives markets rose by 13.7% in 2019 to reach a record of 34.47 billion contracts. Futures volume rose 12% to 19.24 billion contracts, while options volume rose 16% to 15.23 billion contracts,” the FIA stated. 

The data also showed some surprising results as well as some trends. 

One big surprise was that the National Stock Exchange of India (NSEI) led the way in trading volume for options and futures. 

This was due to strong growth, NSEI grew 57.27% in trading volume from 2018.

Meanwhile, the CME, which finished second, saw its volume reduced by 2.01% from 2018. 

The global futures and options trading hit a new record for the second year in a row, according to one of the charts. 

The top fifteen are below.

According to Acworth, much of the global growth was due to growth in the Asia Pacific and Latin America regions. 

Particularly, it was the aforementioned NSEI, along with the B3 from Brazil, which grew by 50.8% and multiple exchanges in China. 

The Shanghai Futures Exchange and Dalian Commodity Exchange saw growth in the volume of 20.4% and 38.1% respectively from 2018-2019. 

The FIA also looked at the open positions which remained at year-end.

While CME, number two in total volume, had 113,338,802 in open contracts and NSEI, number one, only had 9,374,207 contracts open. 

“Volume is basically tracking the flow of transactions taking place on the exchange open interest measures the number of positions outstanding at any point in time. So, think flow versus inventory,” Acworth said during the webinar

The FIA also briefed how some other exchanges were doing in their press release from January 16. 

“The Intercontinental Exchange’s trading volume fell 9% to 2.26 billion contracts, driven by lower levels of activity at all of its subsidiary exchanges in Europe, North America, and Asia-Pacific.

“Eurex, the fifth largest exchange by volume, traded 1.96 billion contracts in 2019, almost the same as 2019, while open interest rose by 5.1% to 126.6 million contracts, the third-highest level in the world.

“Among the smaller exchanges, two stood out for exceptional growth. The Indian Commodity Exchange saw its volume triple to 88.2 million contracts, mainly due to a surge in the trading of its diamond futures. The China Financial Futures Exchange, which offers futures on equity indices and government bonds, grew extremely rapidly in 2019, with both volume and open interest rising to record levels.”