UAE’s leading derivatives bourse, The Dubai Gold and Commodities Exchange (DGCX), has reported its metrics for the month of August 2015, recording a two-year high as heightened market volatility boosted trading on the exchange, according to a DGCX statement.
The standout figure shows the highest average monthly Open Interest (OI) recorded, with 91,797 contracts, representing a 17% jump from the previously recorded high set during the previous month when the exchange registered 78,391 contracts. An all-time high OI of 125,066 contracts was achieved on August 27, 2015. Increasing open interest means that new money is flowing into the marketplace.
August volumes were up 35%, trading 1,538,636 contracts. The figure represents a two-year high.
On a monthly basis, August volumes were up 35%, trading 1,538,636 contracts. The figure represents a two-year high, and a 67% YoY increase from August 2014.
The overall Average Daily Volumes (ADV) reached 73,268 contracts in the month of August 2015, whilst the exchange’s YTD volumes also notched a growth of 18% compared to the same period last year in 2014.
Emerging market (EM) currencies also stood out. Indeed, the recent volatility in FX markets drove substantial volumes on DGCX’s EM currency products. The Indian rupee options contracts garnered significant traction with 21,221 contracts traded in August, in comparison to 9,511 contracts traded in July 2015. The rupee options contract recorded a new high in ADV, trading 1,011 contracts in August.
Quanto Products Shine Once Again
Building on July’s standout performance, the DGCX witnessed high volumes in the precious metal segment, which jumped on the availability of its Indian Gold Quanto futures. Average Daily Volumes on DGCX’s India Gold Quanto contract grew by 30%, trading 671 contracts in August 2015.
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Our FX Futures and bullion products are attracting more traders than before as they seek safety in trading and hedging.
The Gold Quanto affords investors access to the Indian gold market without inherent exposure to movements in the USD/INR, a major draw amongst investors in this realm who were reticent to take on exposure to additional volatility.
In saying that, the Indian Rupee Quanto futures traded 230,493 contracts, up 69% from July, crossing the 1.5 billion USD mark in terms of traded value.
According to Gaurang Desai, founding member and newly appointed CEO of DGCX, in a recent statement on the metrics: “Our FX Futures and bullion products are attracting more traders than before as they seek safety in trading and hedging in a well regulated and transparent electronic platform like DGCX. This is validated by the fact that the Exchange has witnessed a 20% increase in member participation since January 2015.”
The Exchange has witnessed a 20% increase in member participation since January 2015.
Volumes on DGCX S&P BSE Sensex futures jumped 38% in August, trading 19,023 contracts, in comparison to 13,820 contracts in July 2015. The contract also recorded the second highest ADV since August 2014 with 906 contracts, up 51% from last month. This reflects the recent movements in global stock markets following the devaluation of the Chinese yuan.
“As uncertainty in global markets looms, market participants are progressively looking at ways to hedge and manage their price exposure. This is where a secure trading platform like DGCX comes into effect as it offers traders and investors with various hedging and risk management instruments which can soften the impact of market volatility,” concluded Gaurang.