Taiwan Futures Exchange (TAIFAX) hits all-time trading record in 2020
The need for OTC brokerages to go down the multi-asset route is clearly displayed by results such as this, especially in the all important Asia Pacific region
The Taiwan Futures Exchange (TAIFEX) announced that it achieved a new record volume of 341,393,346 contracts in 2020, a 30.9% increase compared to 2019. Average daily volume (ADV) for the full-year also reached an all-time record at 1,393,442 contracts.
This result is yet another indicator that the retail trading sector, especially in South East Asia which is an epicenter of high volume market activity conducted largely by individual traders as a part time endeavor and via introducing brokers and money managers, is very much operating on a multi-asset basis, with exchange traded futures and equities at the very heart of the trading world.
Thus, it is clear that going down the multi-asset route is a long overdue natural progression for retail OTC derivatives brokerages if they want to onboard a new and large client base which has a longer lifetime value and requires a diversified product range.
TAIEX Options (TXO), the world’s sixth most traded equity index option ranked by the Futures Industry Association, increased 18.7% to 201,733,160 contracts in annual volume, setting a historical high. TAIFEX’s two other flagships saw even greater growth with Mini-TAIEX Futures (MTX) and TAIEX Futures (TX) increasing 101.9% to 60,051,670 contracts and 35.3% to 46,324,077 contracts, respectively. Strong market demand pushed MTX up to a record annual volume, averaging 245,109 contracts on a daily basis.
TAIFEX also made impressive headway in increasing foreign participation, as well as in attracting more liquidity to its after-hours trading session. In 2020, foreign institutional investors accounted for approximately 26% of TAIFEX’s total trading volume, up from 20.7% in 2019. After-hours trading increased 53.9% year-over-year (YoY), with an average of 348,567 contracts traded overnight, making up 25.0% of total ADV in 2020, up from 21.0% for 2019.
Likewise, the trading of TAIFEX’s foreign equity index products increased significantly, particularly for contracts tracking the three most widely-tracked US stock indices – DJIA Futures, S&P 500 Futures, and Nasdaq-100 Futures – among which the ADVs of the first two were up 16.4% and 8.5% YoY; the ADV of Nasdaq-100 Futures launched by TAIFEX in Q4 2019, on the other hand, tripled to about 3,000 contracts. TAIFEX’s suite of US index futures provide investors with a one-stop shop to collectively manage their risks in the US market.
Looking into the future, TAIFEX plans to introduce more mini sector index futures and mini single stock futures, and remains devoted to the provision of a safe and transparent marketplace for market participants to manage their risks, as well as to fulfil their trading purposes amid this time of uncertainty.