Galen Stops looks at the reasons behind the recent decline in volumes on Western derivatives exchanges.
Things are looking pretty glum for exchange traded
derivatives right now. The scandal at Peregrine Financial Group
this month came just nine months after the collapse of MF
Global and at a time when volumes on most Western exchanges are
falling in the face of continued economic and regulatory
The year-on-year drop in volumes for the first half of 2012
has been quite pronounced. The CME Group posted a 12% dip in
volume, Eurex’s volumes decreased by 11%, NYSE
Liffe’s European volumes were down 20% and
Nasdaq’s derivatives volumes were 16% lower than
the same time last year. ICE was the only one of the larger
Western exchanges to buck the trend, although even its increase
was only marginal.
The significant decline in volumes was felt in the final
quarter of 2011. In December, total monthly volumes on the CME,
Eurex and Liffe’s London operations fell below
300m for the first time since August 2010 and only the sixth
time since the start of 2007. By February, volumes on the three
exchanges were down to 285m, the lowest February volume since
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