The volume of forex futures and options traded on Chicago Mercantile Exchange’s (CME) CME Globex hit an all-time-high monthly volume in September.
Year-over-year, the average daily volume (ADV) of FX futures in contract terms surged thus: Euro (59%), Japanese yen (78%), British pound (84%), Australian dollar (13%), Canadian dollar (31%), Swiss franc (24%) and New Zealand dollar (48%).
For forex options, the numbers improved by: EUR (80%), GBP (74%), and JPY (33%).
CME Group disclosed these on Tuesday in its September and third quarter 2022 market statistics shared with Finance Magnates.
Paul Houston, Global Head of FX at CME Group, explained that the new record was driven not only by “heightened forex volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. Read this Term,” but also “record levels of open interest, particularly from buy-side customers.”
“Record volumes of over 3 million contracts ($272 billion notional) were traded on September 14, as well as another all-time open interest record of 3.25 million contracts ($294 billion notional) on September 8,” Houston disclosed.
‘Record Open Interest’
According to CME Group, in September, the ADV for listed forex products in contract terms surged significantly by 50% YoY.
Furthermore, the average open interest in these products powered up 16% YoY, the leading derivatives exchange said.
Houston explained, “September’s quarterly roll saw record open interest transference as market participants maintained their positions in capital-efficient cleared FX futures and options.
“The open interest transference was 11% greater than historical averages, with 81-90% of positions being rolled across major currencies.”
Furthermore, CME Group disclosed that volumes in blocks and exchange for related positions (EFRPs) of its listed FX futures and options contracts skyrocketed 86% year-to-date 2022 when compared to the same period in 2021.
Additionally, the derivatives exchange group noted that volumes on FX Link, which allows for seamless connection between the FX futures contract and the over-the-counter FX marketplace, hit an all-time monthly volume record of 47,000 contracts in September.
This represents a 197% increase when compared to figures recorded in September last year, CME Group said.
On the other hand, the volume is a 98% jump in year-to-date ADV when compared to the same period in 2021.
‘Highest September ADV on Record’
On a whole, CME Group said its ADV grew 36% to 25.7 million contracts in September, representing its highest September ADV on Record.
The leading derivatives marketplace’s ADV for the third quarter of the year ended September also jumped 26% to 22.4 million contracts.
CME Group said the record is its fourth-highest quarterly volume ever.
Meanwhile, Finance Magnates reported on Tuesday that CME Group’s Electronic Broking Service’s (EBS) spot forex average daily notional value climbed 30% month-over-month to $76.3 billion in September.
The EBS, which is owned by the CME Group, is a wholesale electronic trading platform for forex trading with market-making banks.
The volume of forex futures and options traded on Chicago Mercantile Exchange’s (CME) CME Globex hit an all-time-high monthly volume in September.
Year-over-year, the average daily volume (ADV) of FX futures in contract terms surged thus: Euro (59%), Japanese yen (78%), British pound (84%), Australian dollar (13%), Canadian dollar (31%), Swiss franc (24%) and New Zealand dollar (48%).
For forex options, the numbers improved by: EUR (80%), GBP (74%), and JPY (33%).
CME Group disclosed these on Tuesday in its September and third quarter 2022 market statistics shared with Finance Magnates.
Paul Houston, Global Head of FX at CME Group, explained that the new record was driven not only by “heightened forex volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. Read this Term,” but also “record levels of open interest, particularly from buy-side customers.”
“Record volumes of over 3 million contracts ($272 billion notional) were traded on September 14, as well as another all-time open interest record of 3.25 million contracts ($294 billion notional) on September 8,” Houston disclosed.
‘Record Open Interest’
According to CME Group, in September, the ADV for listed forex products in contract terms surged significantly by 50% YoY.
Furthermore, the average open interest in these products powered up 16% YoY, the leading derivatives exchange said.
Houston explained, “September’s quarterly roll saw record open interest transference as market participants maintained their positions in capital-efficient cleared FX futures and options.
“The open interest transference was 11% greater than historical averages, with 81-90% of positions being rolled across major currencies.”
Furthermore, CME Group disclosed that volumes in blocks and exchange for related positions (EFRPs) of its listed FX futures and options contracts skyrocketed 86% year-to-date 2022 when compared to the same period in 2021.
Additionally, the derivatives exchange group noted that volumes on FX Link, which allows for seamless connection between the FX futures contract and the over-the-counter FX marketplace, hit an all-time monthly volume record of 47,000 contracts in September.
This represents a 197% increase when compared to figures recorded in September last year, CME Group said.
On the other hand, the volume is a 98% jump in year-to-date ADV when compared to the same period in 2021.
‘Highest September ADV on Record’
On a whole, CME Group said its ADV grew 36% to 25.7 million contracts in September, representing its highest September ADV on Record.
The leading derivatives marketplace’s ADV for the third quarter of the year ended September also jumped 26% to 22.4 million contracts.
CME Group said the record is its fourth-highest quarterly volume ever.
Meanwhile, Finance Magnates reported on Tuesday that CME Group’s Electronic Broking Service’s (EBS) spot forex average daily notional value climbed 30% month-over-month to $76.3 billion in September.
The EBS, which is owned by the CME Group, is a wholesale electronic trading platform for forex trading with market-making banks.
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