Writing this new global markets supplement one thing became immediately apparent: exchange traded derivatives volumes are growing exponentially across the globe. While this hardly constitutes a shocking revelation given that as economies grow and financial markets mature it is fairly inevitable that there will be a greater need for various market participants to hedge against risk, the sheer level of this increase is striking.
Just the start for Asia
A decade ago 36 m derivatives contracts were traded on the
exchanges covered in the Asia section of this supplement. By
the end of last year that figure had risen to 8.8 bn.
That’s a 24,344% increase. Admittedly this figure
is somewhat distorted by the Korean Kospi 200 and Indian
currency contracts that trade in vast numbers due primarily to
their tiny notional value, but that fact should not necessarily
detract from how impressive this growth has been.
Indeed there is still a lot more room for growth in ETD
trading in Asia given that it’s two biggest
economies, India and China, are still only just beginning to
open up their markets to foreign participation. There is huge
demand to access these markets, as detailed in the Asia segment
on page 8, and while the regulators in these two countries are
taking a cautious approach to allowing foreign investment, it
seems inevitable that these markets will incrementally open up
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