Exchange-traded derivatives (ETDs) - statistics and facts
After years of steady growth, the global volume of exchange-traded derivatives (ETDs) reached an impressive milestone in 2023, surpassing 130 billion contracts. This substantial increase was mainly driven by the growth of activity on Indian exchanges, but also, in general, by rising demand for tools to manage risk and capitalize on market opportunities, reflecting the growing complexity of today’s financial environment.
ETDs have become an essential part of modern markets, offering hedge funds, institutional investors, corporations, and individual traders the ability to hedge risks, speculate, and manage exposure across various of asset classes. As financial markets evolve, the importance of ETDs in supporting both stability and strategic decision-making continues to grow.
Looking ahead, the ETDs market is poised for substantial growth, driven by the need for effective hedging amid persistent global economic and geopolitical uncertainties. Emerging markets are expected to contribute significantly, as increasing liquidity and accessibility will attract new participants. Additionally, the rise of innovative products, such as derivatives linked to ESG metrics, cryptocurrencies, and new asset classes, will likely redefine market dynamics and expand trading opportunities.
ETDs have become an essential part of modern markets, offering hedge funds, institutional investors, corporations, and individual traders the ability to hedge risks, speculate, and manage exposure across various of asset classes. As financial markets evolve, the importance of ETDs in supporting both stability and strategic decision-making continues to grow.
Most sought after asset classes
In 2023, volumes across all underlying asset classes increased. Equity derivatives were by far the most traded, particularly single stock options, with Tesla, Apple, NVIDIA, and Amazon leading in trading activity. The commodities segment was also very active, due to volatile prices and amid concerns over supply chain disruptions. Interest rate derivatives too attracted investors’ attention, as central banks continued adjusting monetary policies in response to inflationary pressures. Finally, foreign exchange futures and options saw increased participation due to currency fluctuations caused by geopolitical tensions and stalling economic growth.Market developments: Will ETDs continue to grow?
Overall, the surge in ETDs volume was driven by heightened market volatility, fueled by geopolitical tensions, inflation, and shifting monetary policies, which increased the demand for hedging and speculative instruments. Additionally, advancements in technology and greater retail participation made derivatives trading more accessible - and will continue to do so in the future.Looking ahead, the ETDs market is poised for substantial growth, driven by the need for effective hedging amid persistent global economic and geopolitical uncertainties. Emerging markets are expected to contribute significantly, as increasing liquidity and accessibility will attract new participants. Additionally, the rise of innovative products, such as derivatives linked to ESG metrics, cryptocurrencies, and new asset classes, will likely redefine market dynamics and expand trading opportunities.
