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Global futures and options trading reaches record level

Global futures and options trading reaches record level in 2020

FIA released yearly statistics that show the total number of futures and options traded on exchanges worldwide reached a record level of 46.77 billion contracts in 2020, up 35.6% from 2019. Total futures trading rose 32.7% to 25.55 billion. Total options trading rose 39.3% to 21.22 billion. Open interest, which measures the number of outstanding contracts at a point in time, also reached a record high, reaching 987.3 million contracts at year-end, up 9.7% from December 2019.

This is the third year in a row that the global exchange-traded derivatives markets set a record in terms of total trading activity. As in past years, rapid growth on exchanges in Brazil, China and India accounted for much of the increase. An additional factor in 2020 was an explosion in retail trading of equity options, particularly in the US. Equity options traded on US securities exchanges jumped 52.4% to 7.47 billion contracts in 2020.

Not all sectors enjoyed an increase in trading activity. The interest rate category in particular suffered from a steep decline in both volume and open interest. Trading of interest rate futures and options fell to 4.15 billion contracts, down 13% from the record level set in the previous year, and open interest stood at 176.6 million contracts at year-end, down 19.6% from December 2019.

FIA’s statistics on volume and open interest are collected from 80 exchanges operated by 52 companies in 33 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 will hold a webinar on Jan. 27 to provide a more detailed look at global trends in futures and options trading. Click here for more information.
 

Regional Rankings

Exchanges in the Asia-Pacific region had the largest increase in trading in 2020. Total volume in that region reached 20.15 billion contracts, up 5.64 billion or 38.9% from the previous year.

North America, the second largest region in terms of trading volume, recorded 12.85 billion contracts traded in 2020, up 2.58 billion or 25.2% from the previous year.

Latin America, the fastest growing region in percentage terms, increased its volume by 2.33 billion or 56.9% to a total of 6.43 billion in 2020. Europe, which now ranks fourth, recorded 5.6 billion contracts traded in 2020, an increase of 567 million or 11.3% from the previous year.

Europe and North America continue to account for the majority of open interest. Total outstanding positions at year-end in the North American region was 515.9 million contracts, up 13.9% from the previous year, and equivalent to more than half of all outstanding contracts worldwide. Open interest in Europe stood at 209.3 million contracts at year-end, down 4.9% from December 2019, but equivalent to 21.2% of global open interest. Asia-Pacific open interest stood at 86.2 million contracts at year-end, up 8.2% from the previous year, but equivalent to only 8.7% of global open interest.
 

Category Rankings

Equity-related derivatives accounted for the majority of the increase in trading activity in 2020. Futures and options on equity indices, the largest category of the listed derivatives markets in terms of volume, reached 18.61 billion contracts traded in 2020, an increase of 6.15 billion or 49.3% from 2019. Futures and options on individual equities reached 9.9 billion in 2020, an increase of 3.8 billion or 62.3% from the previous year.

In the commodity sector, energy and agricultural contracts had the highest growth rates. The trading of energy futures and options rose 24% to 3.15 billion contracts, while trading of agricultural futures and options rose 45.4% to 2.57 billion contracts. In both categories, the majority of the growth came in contracts listed on exchanges in China.
 

Exchange Rankings

The National Stock Exchange of India once again came out on top in terms of total volume. The exchange reported total trading volume of 8.85 billion contracts in 2020, up 48.1% from the previous year. Brazil’s B3 continued its rapid growth, with total trading volume rising 62.5% to 6.31 billion. CME Group came in third, with total volume of 4.82 billion, almost unchanged from the previous year. Intercontinental Exchange came in fourth, with volume rising 23.6% to 2.79 billion contracts. Close behind was Nasdaq, with volume rising 49% to 2.66 billion contracts.

The OCC continued to rank as the world’s largest clearinghouse for derivatives. The OCC, which provides clearing for more than a dozen trading venues in the US, cleared 7.52 billion futures and options in 2020, 52.3% higher than the previous year, and open interest stood at 394.9 million contracts at year-end, up 31.8% from December 2019, and more than twice as large as any other derivatives clearinghouse.

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