Institutional participation in CME Group's listed foreign exchange derivatives market has reached new highs as buy-side firms increase their use of centrally cleared FX futures and options.
Asset Managers Push CME FX Open Interest to New High
Asset managers' notional open interest in CME FX futures exceeded $200 billion for the first time, the exchange operator reported. The number of large open interest holders in FX futures also reached a record 1,446, based on the US Commodity Futures Trading Commission's Commitments of Traders report covering positions as of August 25.
Combined open interest across CME's FX futures and options reached 4,410,167 contracts on September 4. That was 140,545 contracts, or approximately 3.3%, above the previous record of 4,269,622 set on June 11.
"The record participation we're seeing underscores growing buy-side demand for the capital efficiencies, transparency and central clearing that futures provide," said Paul Houston, Global Head of FX Products at CME Group.
According to Houston, clients are using the exchange's futures and options across a wider range of currency pairs, extending beyond major currencies into emerging markets.
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Open Interest Shows Exposure
Unlike trading volume, which measures the number of contracts changing hands during a given period, open interest counts contracts that remain outstanding.
The new high indicates that market participants were maintaining more FX exposure through CME contracts, rather than merely generating higher turnover within a trading session.
However, higher open interest does not indicate a common directional view on the dollar. Every outstanding contract includes both a long and a short side, and institutional positions may represent hedges, relative-value trades or outright macro exposure.
Establishing whether investors were positioning for dollar appreciation or depreciation would require a breakdown by currency, maturity, instrument and trader category that CME did not provide.
CME also did not disclose how the record open interest was divided between futures and options, individual currencies, maturities, or G10 and emerging-market contracts.
