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The number of equity derivatives contracts traded plunged 20.4% globally to 14.9 billion in 2012, the first drop in nearly a decade, new figures from the World Federation of Exchange have shown.
The WFE said the decline in equity derivatives trading – the first since 2004 – could be explained by a decrease in volatility seen throughout 2012. The trade association also noted the drop bears similarity with the 22% decline in the value of equity trading among its members in 2012.
Figure from the WFE, which represents 58 publicly regulated stock, futures and options exchanges globally, also show a 17% decline in the volume of interest rate options and futures traded. This may be due to weak economic growth and a continued low interest rate environment, according to the WFE.
The latest figures bear similarity to listed derivatives volumes that have recently been announced by exchanges, with the London Stock Exchange Group (LSEG) and NYSE Euronext both revealing declines in the derivatives contracts they offer.
The value of derivatives trading on LSEG – offered on its Turquoise multilateral trading facility, Italian IDEM market and EDX platform for Nordic derivatives – slipped 24% to £9.7 million from £12.8 million for the nine months ending 31 December.
Similarly, NYSE Euronext figures released earlier this year showed average daily volumes (ADV) of its European derivatives products – which primarily consist of short-term interest rate futures – were down 16.8% in 2012. In the US, the firm’s equity options ADV also dropped 12.2% to 14.7 million contracts, while futures and futures options ADV slid 10.4% to 72,700 for 2012.