Global Exchange Traded FX Growth Anemic in 2019

The volume of exchange traded currency futures and options traded in 2019 grew just 0.2% compared to the previous year, according to new data from the Futures Industry Association (FIA).

In total, 3.9 billion currency futures and options were traded on exchanges last year. This means that in percentage terms, this segment which accounted for 11.4% of overall futures and options trading activity grew by less than any other asset class. Only one asset class, non-precious metals, saw a decline in trading activity last year.

Open interest (OI) on exchange traded currency futures and options stood at 24.4 million in December 2019, down 14.4% compared to 28.5 million of OI recorded in December 2018.

Despite currency volumes being largely flat year-on-year in 2019, they have clearly been trending upwards since 2014, having increased 85.5% over this five-year period. Last year was only the fourth time in the past decade that more than 3 billion currency futures and options have been traded on exchanges.

Overall, 34.5 billion futures and options were traded across all asset classes last year, according to the FIA data. This represents a 13.7% year-on-year increase.

The FIA’s statistics on volume and open interest are collected from 80 exchanges operated by 52 companies in 34 countries. The data is based on the number of contracts traded and/or cleared on these exchanges and are adjusted to avoid double counting.

The FIA data shows that exchanges in APAC and LatAm grew the most rapidly in 2019. The number of contracts traded on exchanges in APAC rose 29.1% to 14.49 billion contracts, while LatAm exchange volumes grew 47.6% to 4.10 billion contracts.

In contrast, trading activity in North America and Europe declined in 2019. Volume on North American exchanges fell 2.8% to 10.27 billion contracts, while volume on European exchanges fell 4.4% to 5.03 billion contracts.

As a percentage of worldwide trading activity, exchanges in APAC accounted for 42% of the global trading volume in 2019, North America came in second with 29.8% of global trading volume, and Europe third with 14.6%.

Options volumes on APAC exchanges overtook the volumes on North American exchanges in 2019, with the former rising 47% to 6.83 billion contracts, while the latter fell 3.7% to 6.01 billion contracts.

The regional balance was very different in terms of OI, however. At year-end 2019, more than 453 million futures and options were outstanding in North America. That was equivalent to 55% of the global total. By contrast, the APAC region had 79.5 million contracts outstanding at the end of 2019, up 17.2% from the previous year-end, but only 8.2% of the global total. OI in Europe rose 3.7% to 220 million at year-end, equivalent to 25.6% of the global total.  

Total worldwide OI stood at 900 million contracts at year-end, up 8.8% over the previous year and an all-time record.

Galen Stops

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