NDF and Currency Options Activity Rises in January on US-Based SEFs
by
Adil Siddiqui
Trading volumes on Swap Execution Facilities rose on a month-on-month basis in January. The US regulated entities saw an uptake in overall volumes across its two currency instruments, NDFs and Options.
The CFTC authorized exchange saw volumes increase 4.35% on a MoM basis, in December, members reported a total of $711 billion, with $402 billion in NDF contracts and $309 in FX Options contracts. In January, NDF instruments totalled, $424 billion and Currency Options $318, both rising from figures reported in December.
Inter-Dealer Brokers Dominate
The bulk of the orders are executed on four venues, the world's largest inter-dealer brokers such as ICAP and BGC are in top spot. In January, ICAP was the most liquid FX NDFs venue reporting a total of $124 billion in notional volumes. In the Currency Options market BGC led the way with a total of $104 billion. Tullett Prebon and GFI were the next most active in the NDF segment.
The Brazilian real was the most active NDF contract with the lion’s share of activity, the BRL contract had 43% market share, followed by Asia’s second most populous country's currency the Indian rupee, which recorded 9.5% in trading flows. South American cross, the Chilean peso and Asia's Chinese yuan were the next most liquid at 3rd and 4th place, respectively.
NDFs are defined as synthetic FX forward contracts on non-convertible currencies or are traded on currencies with low Liquidity in the marketplace, the crosses are predominantly from emerging market nations which are undergoing economic reform and liberalization.
The NDF contract is used mainly used by hedgers to manage currency exposure, however in 2013, the Indian rupee INR NDF contract saw speculators bullying the market in an attempt to destabilize the volatile INR contract which weakened 20% against the dollar.
SEFs were established in 2013 amid new rules deployed in the Dodd-Frank Act. The SEF provides pre-trade information and centrally clears the OTC contracts, the bulk of volumes are on interest rate swaps, followed by credit and FX contracts.
Last month, BGC reported that it had enhanced its product offering on its e-Trading Platform, the global produced added the INR NDF contract.
The CFTC authorized exchange saw volumes increase 4.35% on a MoM basis, in December, members reported a total of $711 billion, with $402 billion in NDF contracts and $309 in FX Options contracts. In January, NDF instruments totalled, $424 billion and Currency Options $318, both rising from figures reported in December.
Inter-Dealer Brokers Dominate
The bulk of the orders are executed on four venues, the world's largest inter-dealer brokers such as ICAP and BGC are in top spot. In January, ICAP was the most liquid FX NDFs venue reporting a total of $124 billion in notional volumes. In the Currency Options market BGC led the way with a total of $104 billion. Tullett Prebon and GFI were the next most active in the NDF segment.
The Brazilian real was the most active NDF contract with the lion’s share of activity, the BRL contract had 43% market share, followed by Asia’s second most populous country's currency the Indian rupee, which recorded 9.5% in trading flows. South American cross, the Chilean peso and Asia's Chinese yuan were the next most liquid at 3rd and 4th place, respectively.
NDFs are defined as synthetic FX forward contracts on non-convertible currencies or are traded on currencies with low Liquidity in the marketplace, the crosses are predominantly from emerging market nations which are undergoing economic reform and liberalization.
The NDF contract is used mainly used by hedgers to manage currency exposure, however in 2013, the Indian rupee INR NDF contract saw speculators bullying the market in an attempt to destabilize the volatile INR contract which weakened 20% against the dollar.
SEFs were established in 2013 amid new rules deployed in the Dodd-Frank Act. The SEF provides pre-trade information and centrally clears the OTC contracts, the bulk of volumes are on interest rate swaps, followed by credit and FX contracts.
Last month, BGC reported that it had enhanced its product offering on its e-Trading Platform, the global produced added the INR NDF contract.
EU Parliament Imposes €10,000 Cash Payment Limit in New Anti-money Laundering Legislation
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
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Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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