Borsa İstanbul Derivatives Market (VIOP) Becomes The “World’s Fastest Growing Derivatives Market” In 2015

The annual trading volume at the region’s leading exchange, Borsa İstanbul Derivatives Market (VIOP), increased by 52 percent in 2015, reaching an all-time record of 90.3 million contracts. Reaching all-time highs in almost all products traded on the market, VIOP became the “world’s fastest growing derivatives market” in 2015. The trading value in Power Futures contracts grew by a five-digit figure while the growth in FX Options and Single Stock Futures stood at four-digit figures. Trading levels in the FX Futures, Index Options and Single Stock Options contracts grew by three-digit figures.

Borsa İstanbul Derivatives Market (VIOP), the region’s leading and most diverse derivatives marketplace, announces that full-year 2015 total trading volume reached a record of 90.3 million contracts, up 52 percent from 2014. Total traded volume reached TL 575 billion in nominal terms, breaking a record. As part of that increase, total options volume grew by 10 times to a record 2.6 million contracts, whereas total futures volume up 48 percent reaching a record 87.6 million contracts. Additionally, daily average number of open interest reached 875,134 contracts, up 83 percent. Trading levels were exponentially up across most products, making VIOP the “world’s fastest growing derivatives market” in 2015.

Increased interest by international investors

There was a surge in demand from international investors for Borsa İstanbul Derivatives Market products in 2015. The total trading volume of foreign investors increased by 122 percent reaching a record level of 30 percent of the total volume. The growth rate of trading volume of international investors is almost four times the local investors’ growth rate, which is around 33 percent.

FX Futures Contracts breaking records

The traded value in FX Futures contracts increased by 224 percent to a record level of TL 104 billion. It registered an increase by 41 percent to TL 32 billion in 2014. The success of FX Futures Contracts is attributable to certain factors including the decrease of the minimum price tick of contracts, introduction of futures contracts of one-month maturity, and change of the settlement prices; all of which is a result of the analysis of market needs. In 2015, the share of foreign investors in FX futures trading value increased from 9 percent to 36 percent , corresponding to a stellar increase of 14 fold in nominal terms.

FX Options volume achieved a phenomenal growth rate of 6,893 percent reaching TL 4.2 billion in 2015. Innovative revenue sharing market making scheme enabled tight executable on-screen bid-offer spreads for FX Options. Borsa İstanbul VIOP was also shortlisted in the “Most Innovative New Contract” category at the FOW International Awards for its Non-deliverable USD/TRY FX options contract, offering investors and companies the opportunity to hedge against currency risk at a transparent venue in compliance with best execution principles and with a central counterparty clearing service (CCP). 

Increased Product Diversity

With increased product diversity, VIOP’s depandance on a single product was alleviated. The traded value of the products other than index futures reached 20 percent of the total traded value. The share of FX Futures Contracts in the total traded value reached 18 percent, breaking a record. 

In 2015, the daily average number of open interest reached 875,314 contracts, up 83 percent. In the last couple of years, the daily average number of open interest increased by more than two-fold. Increased open interest positions is an indication of investors using VIOP in their risk management choices.

The traded value of Single Stock Futures and Single Stock Options contracts registered increases by, respectively, 1,198 percent to a record level of TL 1.8 billion and by 726 percent to a record level of TL 527 million. The revenue sharing market making scheme initiated for single stock futures and options in 2015 proved successful through high traded value while offering investors the opportunity to trade at low spreads.

In 2015, Power Futures contracts trading volume increased exponentially to a record of TL 301 million, up 73,997 percent. As of the end of December 2015, open interest in power futures increased 715 fold and reached 4,127 contracts. As we continue to see global energy market turbulence, energy companies and their clients are utilizing Borsa İstanbul VIOP’s power futures for their risk management thanks to increasing liquidity as a result of the introduction of six market makers, 16 maturity terms, and central counterparty clearing (CCP) service provided by Takasbank.

The right market structure, efficient market making model and training lead to success

Behind Borsa İstanbul VIOP’s success, is training. In order to increase the risk management awareness of the local investors and corporates, 38 VIOP trainings, seminars, webinars and workshops were organized in 2015. Total number of events organized reached 142 in the last two years. II. VIOP Risk Management Conference, seminars in cooperation with broker-dealers, data vendors, Energy Traders Association (ETD), Webinars, and daily Periscope broadcasts were among the activities of Borsa İstanbul Derivatives Market during the last year. Additionally, two nationwide real-time simulated trading competitions (VIOPS) were organized. Students and professional traders participated in simulated trading to experience trading and improved their ability to better manage the risks associated with trading these volatile markets.

As the world’s fastest growing derivatives market, Borsa İstanbul Derivatives Market (VIOP) continues to take determined steps to become the region’s preferred risk management platform thanks to its wide product range, central counter-party guarantee, and increased liquidity.