THE GLOBAL MARKET FOR EXCHANGE-TRADED DERIVATIVES: 21ST CENTURY TRENDS, INNOVATION AND FAILURE
Utilizing a comprehensive database spanning 110 exchanges in five geographic regions, we examine trends in trade activity and contract innovation of exchange-traded futures and options over the period 2002–2021. We find that global volume has experienced a ten-fold increase driven by significant increases at Asian and North American exchanges, and primarily in the equity, interest rate and currency asset classes. New contract innovation has been greatest in North America and in the energy and equity asset classes. Further, volume and open interest attributable to new contract innovation have now surpassed those of legacy contracts. Turnover showed a significant increase driven largely by trade activity in Asian markets. Finally, new contract failure rates have been highest at North American exchanges as well as in the interest rate and energy asset classes.
Copyright (c) 2022 Gerald Gay, Ekaterina Emm, Han Ma, Honglin Ren
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors submitting articles for publication warrant that the work is not an infringement of any existing copyright and will indemnify the publisher against any breach of such warranty. By publishing in Applied Finance Letters, the author(s) retain copyright but agree to the dissemination of their work through Applied Finance Letters.
By publishing in Applied Finance Letters, the authors grant the Journal a Creative Commons nonexclusive worldwide license (CC-BY-NC-ND: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License) for electronic dissemination of the article via the Internet, and, a nonexclusive right to license others to reproduce, republish, transmit, and distribute the content of the journal. The authors grant the Journal the right to transfer content (without changing it), to any medium or format necessary for the purpose of preservation.
Authors agree that the Journal will not be liable for any damages, costs, or losses whatsoever arising in any circumstances from its services, including damages arising from the breakdown of technology and difficulties with access.