Regulated derivatives see record trading

Derivatives exchanges have seen strong rises in trading volumes at a time when the take-over battle intensifies for the London International Financial Future and Options Exchange (Liffe).

Liffe has seen year-to-date trading values up 57% on the similar period in 2000, with £70 trillion (Eur112 trillion) worth of contracts traded. Total values for all of last year were £61 trillion. The figures support Liffe’s claim to be Europe’s largest derivatives market according to trading values.

Rival international derivatives exchange Eurex, owned by the Deutsche Borse and the Swiss Exchange, also saw a large uncrease in trading in September with 68.5 million contracts traded. This tops Eurex's previous record month when 61 million contracts were traded in March this year. Capital market products were the highest volume segment in September, with 38.5 million contracts traded, up 46% on September 2000 volumes. Growth has been higher in Euro STOXX derivatives, which have quadrupled compared to September 2000, than in DAX contracts. While exceeding Liffe’s 23.5 million total future and options contracts traded in September in volume, the real value of the trades is probably less, since contract values are lower at Eurex. Eurex refused to provide trading values.

Meanwhile, Paris-based exchange operator Euronext, which is believed to be interested in bidding for Liffe, saw 283.9 million futures and options contracts traded during the first nine months of the year, 13.5% more than in the same period in 2000. Euronext September volumes were 43.4 million, up 58% on September last year. Tradng in equity and index options rose sharply last month as volatilities rose in the wake of the terrorist attacks in the US. Equity options rose 78.7% while index options grew 82.3% on August volumes. The London Stock Exchange (LSE) is currently the only potential buyer of Liffe that has publicly stated it has made an approach. Other potential bidders include Euronext, the Chicago Mercantile Exchange, US equity exchange Nasdaq and the Deutsche Borse, parent of Eurex.