Trade Volumes in Polish Stocks Increase, Derivatives Decline in May

Poland’s main stock exchange has reported promising volumes for the month of May. The Warsaw Stock Exchange (WSE) recorded PLN 17.4 billion (US $5.41) total equity turnover in May, an increase of 17.2% year on year. At the same time figures for derivatives instruments saw a decline month on month as Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term puts traders back.

The volume of trading in all derivatives was 875 thousand instruments in May 2013, a decline of 10% MoM, figures for April were 972.1 thousand instruments. Its benchmark stock index contract saw a decline of 15% MoM.

Poland a new comer to the EU (2004) has been one of the best performing economies post 2008 crisis, in 2009 it was the only EU nation whose GDP increased. The EU’s sixth largest economy has benefited from being a large economy, population of 38 million, with quite substantial domestic demand.

Poland’s financial markets are one of the most advanced in the region, Warsaw has become a financial hub for domestic firms going for IPO.

Local Investors

Retail investors in Poland have benefited from numerous programmes by the local exchange in educating them about the nature of investment products. This has had a positive impact on investors who drive the local equities markets.

“The WSE have educated over two generations of traders. At the moment there is over 1.5 million retail account open – quite a high number. The number of accounts using derivatives is around 300 000, they already know how to trade, know the tools like technical analysis," explains Max Skolik, Head of FX at BRE Dom Inwestycyjny, a Polish bank offering FX and equities trading.

Poland witnessed a surge in banks offering FX platforms to retail and institutional investors in 2012, FX has been growing as an alternative investment product for traders in Poland, this has primarily been due to the weakness and declining volatility in domestic products.

Tomasz Maczka, Director of Sales at Noble Markets, a Polish broker states in a comment to Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates: “Individual investors in Poland are known for being rather active traders on Warsaw Stock Exchange. However during last 3-4 years due to lower volatility on stock exchange and bear market they became more interested in alternative investment opportunities with currency markets among them. Polish zloty has periods of big volatility against Euro, Dollar or Swiss franc, so big volatility shows traders that there is opportunity for trading.”

With the number of brokerages increasing and margin products becoming more mainstream, there has been an increase in investor participation in FX & CFD trading.

Artur Koziorowski, OTC Business Development Manager at Bank Zachodni WBK estimates there to be around 40,000 investors in the FX markets.