——— FINANCIAL POLICY FORUM ———
New Data from the Futures Industry Association
Financial Policy Forum
January 28, 2005
The Futures Industry Association just released some of the results of their annual survey of trading volume on derivatives exchanges around the world. The figures for global growth in exchange-traded futures and options show strong growth through the first 10 months of 2004 – except in Korea where the world’s largest derivatives exchange experienced a significant decline in the world’s largest derivatives contract. Excluding the effects from changes in the Kospi 200 equity index option, the number of derivatives contracts traded on exchanges around the world rose by 18.9% in the first 10 months of 2004. Altogether, the global number of derivatives contracts traded on exchanges hit 7.4 billion in the first ten months of 2004 – up 9.2% from 6.78 billion in the same period in 2003.
A major source for this increase in
trading volume comes from an interest rate futures
traded on the BM&F in
In contrast to the sharp growth in the
By far the most significant reversal in trading volume was the Kospi 200 equity index option, which traded 221.4 million fewer contracts in 2004. Note that only seven exchanges had total trading volume in excess of 200 million contracts in 2003.
The Futures Industry Association also
releases a few additional figures to the Financial Policy Forum to cover all of
2004. One important figure showed the
ranking of the 60 largest derivatives exchanges around the world. Again, the growing presence of derivatives
trading in developing countries stands out.
Three of the largest 10 exchanges are in developing countries (
Another important figure shows the total trading volume for all of 2004, and the breakdown of growth in trading volume by type: equity, interest rate, foreign exchange and commodity. The total number of derivatives contracts traded in 2004 was 8.8 billion – up 9% from 8.1 billion in 2003. The fastest growing type was foreign exchange contracts (35.4%) followed by individual equities (28.4%) and interest rate contracts (20.7%). Energy derivatives were up 11.9% but this may include some OTC energy derivatives cleared by NYMEX. Figures for equity indices were overwhelmed by changes in the Kospi 200 option.
In sum, the FIA survey shows continued
growth in derivatives trading and provides further indications that a growing
source of the growth will be in developing countries. At the same time it shows that interest in
trading on exchanges in the
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