Derivatives Giant CME Sees Spike in Volumes as Volatility Picks Up

Trading volumes at the world's largest derivatives exchange continue to shine. The CME reports a new record in its FX

Global FX traders have welcomed the recent outburst in volatility as markets pick up after a sloppy summer. US-based, Chicago Mercantile Exchange (CME)  has reported a record in its FX futures and options contracts volumes. The multi-asset exchange saw activity jump on the back of movements in the currency markets.

The trading venue saw Open Interest for FX futures and options combined reach 2,630,556 contracts yesterday, with notional equal to $309 billion. The current figure surpassed the exchange’s previous record which was set on the 19th of March, 2013, with 2,589,468 contracts and $286 billion in notional value traded.

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Major currencies have seen sharp moves against the greenback, recent announcements coming from the ECB, coupled with the much awaited Scotland referendum have given traders a new awakening.

Craig LeVeille, CME Group Executive Director, FX Products, commented about the current market climate in a statement: “The recent events, ECB cut, upcoming Brazilian election and Scottish referendum, have created a spark in global volatility which is being reflected in these new records and sudden surge in average daily volumes.”

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News of yesterday’s upbeat volumes follow in from the CME’s uptake across its FX offering. The exchange hit an all-time high in its FX Options product range, with volumes reaching a record $32.4 billion in notional value and a sizeable 231,307 contracts exchanging hands, on the fourth of September 2014.

This was accompanied with an all-time record volume of its FX Futures offering at recently launched, CME Europe on Sept. 9, 2014, reaching 4,080 contracts and $527 million in notional.

The rise in activity is promising for the wider FX market as participants have been facing tough operating conditions. CME’s growth in volumes highlights traders sentiment to transact on recognised transparent venues in light of the recent fiasco impacting the currency markets with FX rates manipulation.

Mr LeVeille added: “This reflects that participants have continued to value the benefits of holding risk exposure in CME FX futures, and gained an increased understanding of the capital efficiency advantage of futures in the post.”

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