Global futures and options volume rose slightly in Q1: FIA

Strong gains seen in interest rates and currencies

 The Futures Industry Association (FIA) released Q1 volume statistics for the global derivatives business. Here are key findings:

  • Strong gains seen in interest rate and currency trading
  • Kospi size change drags equity index trading down
  • North American exchanges slightly outpace Asian exchanges

The number of futures and options traded on exchanges around the globe reached 5.41 billion during the first quarter of 2013, up 0.5% from 5.39 billion during the first quarter of 2012. Futures-only volume rose 21.2% during the quarter to 3.06 billion from 2.53 billion contracts, but that was almost completely offset by a 17.9% decrease in options volume to 2.35 billion from 2.86 billion contracts.

Strong gains were seen across several asset classes. Interest rate-based volume rose 8.4% to 848 million from 782 million contracts, currency-based volume rose 32.4% to 733 million from 554 million contracts, energy-based volume rose 53.5% to 325 million from 212 million contracts, agriculture-based volume increased 34.4% to 277 million from 206 million contracts and non-precious metals volume rose 46.5% to 166 million from 114 million.

Those gains were offset, however, by a large decline in the volume of equity index contracts, which slid 24.9% to 1.30 billion from 1.73 billion contracts. Much of that decline was due to a technical factor at a single exchange, however, rather than a change in trading activity. In addition, in March 2012 the Korea Exchange put into effect a five-fold increase in the size of the Kospi 200 options contract, which at that time was the most actively traded derivative contract in the world. As a result, Kospi 200 options volume fell 77.2% to 150 million contracts in the first quarter from 658 million in the first quarter of 2012.

Two other categories also saw less activity. Single stock futures and options volume fell by 6.4% to 1.56 billion from 1.67 billion contracts. Precious metals volume fell by 16.9% to 71 million from 86 million contracts.

Volume rose 1.8% in North America during the first quarter to 1.91 billion from 1.88 billion contracts. In the Asia-Pacific region, volume fell 3.8% to 1.86 billion from 1.98 billion contracts. In Europe, volume rose 9.5% to 1.13 billion from 989 million contracts. In Latin America, volume slid 9.2% to 416 million from 458 million contracts.

Global open interest, which represents the number of contracts outstanding at any one moment in time, was 743 million contracts at the end of March, a 7.3% increase from 693 million contracts at the end of the first quarter of 2012.

Looking beyond the first quarter, the rate of growth began to pick up in the first few months of the second quarter. In the U.S., April volume rose 23.0% to 685 million contracts from 557 million contracts in April 2012. In May U.S. futures and options volume rose 11.6% to 761 million contracts from 682 million contracts in May of 2012. Outside of the U.S., volume during April, the most recent monthly data available, rose 11.6% to 1.27 billion contracts from 1.14 billion.

Note: FIA collects volume and open interest data from 84 derivatives exchanges on a monthly basis. The data are provided by the exchanges on a voluntary basis and are subject to revision by the exchanges. FIA does not audit the exchanges and does not guarantee that the data are accurate.The volume data represent the number of contracts traded on a round-trip basis to avoid double-counting. The open interest data represent the number of positions outstanding at the end of the month. Some exchanges provide facilities for off-exchange transactions to be processed and cleared. FIA data include these types of transactions when reported to FIA by the exchanges.

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