01.17.2020

Global Futures and Options Trading Reaches Record

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.

Open interest, which measures the number of contracts outstanding, also rose to a record level in 2019. The total open interest at the end of the year was 900 million contracts, up 8.8% from the previous year-end.

FIA’s statistics on volume and open interest are collected from 80 exchanges operated by 52 companies in 34 countries. The statistics are based on the number of contracts traded and/or cleared on these exchanges and are adjusted to avoid double counting.

FIA publishes these statistics on an annual basis. FIA also will hold a webinar on Jan. 29 to provide a more detailed look at global trends in futures and options trading.

Highlights

Exchanges in the Asia-Pacific and Latin American regions grew the most rapidly while exchanges in North America and Europe lost volume
Equity index futures and options showed the strongest growth in trading while interest rate futures and options had the largest increase in open interest
Trading activity rose in all commodity sectors except non-precious metals
India’s NSE passed CME as the world’s largest exchange by trading volume

Regional Breakdown

Exchanges in the Asia-Pacific and Latin American regions grew the most rapidly in 2019. The number of contracts traded on Asia-Pacific exchanges rose 29.1% to 14.49 billion contracts, while Latin American exchange volume grew 47.6% to 4.10 billion contracts.

In contrast, trading activity in North America and Europe declined in 2019. Volume on North American exchanges fell 2.8% to 10.27 billion contracts, while volume on European exchanges fell 4.4% to 5.03 billion contracts.

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.

The regional balance was very different in terms of open interest, however. At year-end 2019, more than 453 million futures and options were outstanding in North America. That was equivalent to 55% of the global total.

The Asia-Pacific region had 79.5 million contracts outstanding at the end of 2019, up 17.2% from the previous year-end, but only 8.2% of the global total. Open interest in Europe rose 3.7% to 220 million at year-end, equivalent to 25.6% of the global total.

Total worldwide open interest stood at 900 million contracts at year-end, up 8.8% over the previous year and an all-time record.

Category Breakdown

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.

Interest rate trading rose 4.6% to a record amount of 4.76 billion contracts, primarily due to an increase in interest rate futures trading in Brazil and an increase in interest rate options trading in the U.S. This was the fourth straight year that interest rate trading hit a record.

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.

Agricultural futures and options trading rose 18.8% to 1.77 billion contracts, driven mainly by increased trading activity on the three Chinese commodity futures exchanges. Open interest in agricultural products grew even more rapidly, with year-end open interest jumping 30.9% to 22.4 million contracts.

Trading of non-precious metals such as copper fell 5.5% to 1.44 billion contracts, making it the only category of the global exchange-traded derivatives markets that saw a decline in trading activity in 2019.

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.

Exchange Breakdown

The National Stock Exchange of India grew 58% to 6 billion contracts traded in 2019, surpassing CME Group to become the world’s largest exchange. CME’s 2019 volume in 2019 was 4.83 billion contracts, roughly the same as the prior year.

Trading volume at Brazil’s B3 grew 51% to 3.88 billion contracts, the second fastest rate of growth among the top 20 exchange groups. B3’s open interest grew even more rapidly, jumping 94.4% to 132.3 million contracts. That level of open interest was the second largest total in the world after the OCC, the U.S. clearinghouse that clears trades for five exchange groups.

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.

Source: FIA

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