A-pac Beats North America In Derivative Trading For Jan-june 2010

Buoyed by increase demand for derivative contracts in some of the fast-growing economies, the Asia-Pacific region has ousted North America as the worlds biggest derivatives market. Derivatives contracts traded in Asia-Pacific accounted for 38% of the global aggregate (number of contracts) in January June 2010 period, according to data from the Washington-based Futures Industry Association (FIA), compared with 33% in North America.

This is for the first time that Asia has outpaced North America in futures and options trading volumes since (FIA) started collecting the data in the 1980s. Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in the weather or interest rates.

A segregation of the data reveals, derivative instruments on equity indices topped the list comprising 32.4% (3.63 billion contracts) of the total derivative volume, followed by stocks futures and options contributing 29.4% of the total volume. As far as the percentage change is concerned, derivative contracts on currency surged more than 250% to 1.23 billion contracts in Jan-June 2010 period, the most.

Korea accounted for 42% of derivatives traded across the Asia-Pacific region in the first half of 2010, while those changing hands in the Indian exchanges accounted for 32%, the association said. Chinas exchanges made up 16% of the total.

Contracts traded on the four Indian derivatives exchanges more than doubled to 1.36 billion in the first half of 2010, compared with 542.4 million a year earlier, according to the associations data. In China, contracts that changed hands on three exchanges climbed 60% to 672 million in the same period,

NSE stood second on the list of top exchanges in derivative activity (number of contracts) after Korea, and followed by MCX-SX in the A-PAC region. S&P CNX Nifty Options was the third most traded contract in the equity index category, while Kospi 200 Options and E-mini S&P 500 futures occupied the first and second rank, respectively. E-mini S&P 500 futures was in news recently, after a CFTC-SEC joint investigation found a computer-driven sale of E-mini futures worth USD 4.1 billion by a single trader caused flash crash on May 6.
In terms of value, though, Asia Pacific is far behind. The total turnover of derivative contracts for Asia Pacific stood at USD 77.784 trillion, compared with USD 446.709 trillion for Europe and USD 527.395 trillion for North America.

The total volume of futures and options rose 31.7% in the H1 2010, compared with the corresponding period of the previous year.

About the Author:
The author is Business Editor. Visit at www.religareonline.com to read more such stories.

Article Originally Published On: http://www.articlesnatch.com

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