Listed derivatives trading volumes fell again in June, ending a difficult first half-year for venues with low volatility being blamed for a lack of appetite.
Europe’s two biggest derivatives trading groups, Eurex and Intercontinental Exchange (ICE), both reported lower trading volumes overall, though certain products went against the grain with strong performance.
In June, Frankfurt-based Eurex saw an average daily volume of 6.0 million contracts traded, down 26% from 8.1 million in June 2013. Similar conditions were seen in the US, where Eurex’s International Securities Exchange saw trading volume fall 26% from 2.7 million contracts to 2.0 million over the same period.
Trading activity was down across Eurex’s equity, equity index and interest rate derivatives. Equity derivatives were the worst affected, down by more than a third to 22.7 million contracts. Interest rate derivatives fared better, but still lost 21% year-on-year to trade 45.1 million contracts in June.
ICE’s London-based Liffe exchange has experienced particularly tough trading conditions in interest rate products. Total trading in June was down 34% across the interest rate segment, with 42.9 million contracts traded.
However, while Euribor options performed badly, trading of sterling products was strong. Liffe’s short-dated products were particularly popular, and trading in three-month sterling volumes increased by a huge 354% over the past year to 805,740 contracts. It is thought recent comments by the Bank of England’s governor, Mark Carney, suggesting interest rates will begin to rise from their historic low of 0.5% later on this year, is driving the interest in sterling contracts.
Again, equity derivatives volumes were also down on Liffe, with equity index products falling 17% year-on-year to 7.16 million contracts in June. Individual equity derivatives dropped 16% to 9.76 million contracts.