Brazils B3 exchange overtakes the CME in the number of contracts traded

Darren Sinden

B3’s mini dollar contract traded more than 692 million lots and saw its open interest explode by more than 940%, during 2020

The increasing importance of emerging markets in global futures and options trading has been further underlined with the release of data from the Futures Industry Association (FIA). Which showed that the Brazilian B3 Exchange was the most active marketplace in the Americas, during 2020, when ranked by the volume of contracts traded.

B3 also moved up to the number two spot globally and was only eclipsed by the National Stock Exchange of India, which took the top spot in the list of the worlds most active derivatives market places.

The largest US exchange, the CME Group, was pushed into third place in the global league table. The National Stock Exchange of India almost doubled the combined volumes of the four CME venues by trading 8.850 billion lots compared to the CME’s 4.826 billion.

The B3 exchange-traded just over 6.30 billion contracts during 2020 up from the 3.88 billion it turned over in 2019. Whilst open interest rose on both the Indian and Brazilian exchanges last year there was a 27.70% decline in this metric among CME products.

One might be tempted to think that this was due to the impending demise of dollar Libor and therefore a move away from the CME’s biggest contract the Euro Dollar future.

However, there was a similar decline in open interest on the rival CBOE exchange which suggests that something else is going on here.

Looking at trading growth in futures and options geographically over 2020. We find that the Asia Pacific region saw an increase of 43.10% and that despite the CME falling to third place in the global volume rankings, North American exchanges enjoyed an overall growth in volumes traded of 27.50%.

Whilst Latin American markets posted a combined growth figure of 13.80%. Though this was sharply lower than the growth enjoyed by their North American counterparts, that figure was ahead of the total for Europe, where exchanges saw volume growth of 12.0%, over the course of last year.

If we break the FIA data down by product type we find that contracts over equity indices and individual equities enjoyed the biggest gains with outright growth of 49.30% and 62.30% respectively. There were 18.60 billion equity index contracts traded on the 80 exchanges covered by the FIA research, in 2020, up from 12.46 billion that were turned over in 2019.

Whilst almost 9.90 billion contracts over individual stocks were traded globally in 2020. Up from just under 6.10 billion that were traded around the world in 2019.

FX futures saw trading volumes grow by 14.9% during 2020. However open interest in the class grew by 35.30%. when compared to that seen at the end of 2019.

The most active FX contracts were options over the US dollar Indian rupee exchange rate, which traded almost 770 million lots in 2020. Dollar rouble futures traded on the Moscow Exchange were number two on the most active FX contracts list, turning over 755.4 million lots.

Whilst the Mini US dollar versus the real future, traded on Brazils B3 exchange, was in third place, with volumes of 692.25 million contracts traded last year. Open interest in that contract grew by an astounding 943.4% in 2020, according to the FIA data set.

We have recently written about the opportunities that emerging markets trading could offer to FX brokers and that potential seems to be reinforced by the FIA data.

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