Now, We are officially No. 1

Recently, Futures Industry Association (FIA) came out with its publication on volumes at various exchanges. FIA is the leading global trade organization for the futures, options and exchange cleared derivatives markets, with offices in Brussels, London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from about 50 countries as well as technology vendors, law firms and other professional service providers. FIA compiles monthly reports on volume and open interest for futures and options traded and/or cleared at 80 exchanges worldwide. FIA’s volume report is presented by region and product category and includes trading in:

• Equity Index
• Interest Rates
• Energy
• Agricultural
• Metals
• Currency

As per the report, the National Stock Exchange of India (NSE) has become the world’s largest exchange by trading volumes, outpacing US-based CME Group, the world’s largest derivatives market place.

According to the report, 2019 was a record year of activity as trading in global exchange-traded derivatives markets surged 13.7% to a record 34.47 billion contracts. Futures volumes increased 12% year-on-year to 19.24 billion contracts, while options contracts rose 16% to 15.23 billion.

Few highlights of the report are as under:

Exchange Related Highlights

India’s NSE traded 6 billion contracts in 2019, up a significant 58% from the year prior, making it the largest exchange operator. CME Group fell behind NSE with volume in 2019 after reaching 4.83 billion.

Intercontinental Exchange (ICE) ranked as the fourth largest exchange behind Brazil’s B3, after it saw trading volume fall 9% in 2019 to 2.26 billion contracts, due to lower activity across its exchanges in Europe, the US and Asia-Pacific.

Eurex Exchange was listed as the fifth largest exchange by volume, after trading 1.96 billion contracts in 2019.

Regional Highlights:

Regionally, Asia-Pacific grew the most during the year, and the number of contracts traded across the region’s exchanges totalled 14.49 billion contracts, up 29.1% from last year. At the same time, trading in the US and Europe declined 2.8% and 4.4% respectively.

As a percentage of worldwide trading activity, the Asia-Pacific region had the largest share, with 42% of the global trading volume in 2019. North America came in second with 29.8% of global trading volume, and Europe third with 14.6%.

Options volume on Asia-Pacific exchanges overtook options volume on North American exchanges in 2019. Asia-Pacific options volume rose 47% to 6.83 billion contracts, while North American options volume fell 3.7% to 6.01 billion contracts.

Product Highlights:

Trading of equity index futures and options was one of the main drivers for the overall increase in trading in 2019. Global equity index volume jumped 24.7% to 12.45 billion contracts, with exchanges in India and Brazil accounting for most of that increase.

In the commodity sector, the trading of energy futures and options rose 13.6% to 2.54 billion contracts. Trading of the benchmark WTI and Brent oil futures in New York and London decreased compared to 2018, but that decline was more than offset by increased activity on exchanges in Russia, China and India.

Trading of precious metals exploded in 2019, with volume rising 83.2% to 582.3 million contracts. This was driven mainly by increased trading on exchanges in China, India and Turkey.

Clearly, Asia and specifically India have become a very important hub for derivatives trading. Also, with individual participants commanding ~45% of the average daily traded derivatives volume, one can surely understand where these numbers are coming from. If you want to know more about the pro’s & con’s Attend our FREE Seminar today!

Happy Trading!!!

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