Stock-based derivatives showed a decrease in trading volume in the first half of this year with the South Korean stock market in a slump due to U.S.-China trade disputes. On the other hand, the currency-based derivatives trading volume increased from a year ago as foreign exchange volatility increased along with securities companies’ overseas investment.
The Financial Supervisory Service announced on Nov. 19 that the derivatives trading volume added up to 20,706 trillion won in H1, down 0.9 percent from a year earlier. In particular, stock-based derivatives trading fell 11.5 percent to 9,209 trillion won. This has to do with the fact that the KOSPI stock exchange showed a fluctuation of 254.93 points whereas it had been 283.95 and 359.38 points in H1 and H2 last year, respectively.
Meanwhile, currency-based derivatives trading rose 14.1 percent to 7,150 trillion won based on an increase in currency hedging demand. The won-dollar exchange rate, which had been around 1,100 won per U.S. dollar early this year, reached approximately 1,200 won in mid-May and fell to 1,150 won in June. Interest rate- and credit-based derivatives trading increased 2.9 percent to 4,301 trillion won and 8.8 percent to 18 trillion won, respectively.
Exchange-based derivatives trading totaled 12,023 trillion won with a year-on-year decrease of 8.3 percent. Over-the-counter derivatives trading increased 11.6 percent to 8,683 trillion won. Derivatives trading by securities companies accounted for 52.9 percent of the total derivatives trading volume in H1 while banks, investment trust companies and insurance companies accounted for 38.1 percent, 3.1 percent and 0.8 percent, respectively.
The total trading balance increased 6.7 percent to 10,106 trillion won from Jan. 1 to June 30. Banks accounted for 79.9 percent, followed by securities companies (17 percent), insurance companies (1.6 percent) and investment trust companies (1.4 percent).