Warsaw Stock Exchange Derivatives Market in February 2013

• The volume of trading in all derivatives was 944.1 thousand instruments in February 2013.
• The number of open interest was 234.6 thousand at the end of February 2013.

WIG20 futures

• The volume of trading in WIG20 futures was 591.7 thousand contracts in February 2013;
• The number of open interest in WIG20 futures was 116.6 thousand contracts at the end of February 2013.

Options

• The volume of trading in WIG20 options was 62.4 thousand options in February 2013;
• The number of open interest in options was 50.9 thousand options at the end of February 2013.

Single-stock futures

• The volume of trading in single-stock futures was 65.2 thousand contracts in February 2013;
• The number of open interest in single-stock futures was 18.7 thousand contracts at the end of February 2013;
• The most traded single-stock futures in February were:

No.  Underlying                                            Trading volume (#) in February 2013

1. PKN ORLEN SA                                   29 635
2. PKO BP SA                                           26 390
3. KGHM SA                                             24 899  
4. TP SA                                                     10 129
5. GRUPA LOTOS SA                              9 620

Currency futures

• The volume of trading in currency futures was 223.0 thousand contracts in  February 2013*;
• The most traded currency futures in February 2013 were USD/PLN futures. The volume of trading in USD/PLN futures was 199.7 thousand contracts, representing 89.6% of the volume of trading in all currency futures;
• The number of open interest in currency futures was 36.7 thousand contracts at the end of February 2013.

For more statistics, see Table 1 and Figures 1 and 2 below.

*All figures concerning trade in derivatives include the change in the standard specification of currency futures contracts as of 1 May 2012 whereby the size of such contracts was divided by 10.

# # #

Derivative instruments are the most effective tool which can be used to manage specific risks. Derivatives based on indices and single stocks can be used to manage market risk, for instance to hedge an existing equities portfolio against a decrease in value. Currency futures can be used to hedge against the risk of disadvantageous changes of an exchange rate. This means that derivatives can be used for instance by entities which hold specific currency positions with respect to the following exchange rates: USD/PLN, EUR/PLN, CHF/PLN. Particularly important are options, which provide great flexibility in building hedging strategies. The WSE lists options which expire on four different dates; many series of call and put options with different strike prices are available for each expiry date. Options can be used to build hedging strategies according to different market scenarios and at a different cost of hedging.

Derivative instruments are also an effective investment tool. Derivatives can be profitable when the value of the underlying instrument increases or decreases. Investments in derivatives involve a high leverage. Again, options are particularly important due to their various applications. Options can be used not only to invest in an expected increase or decrease of the value of the underlying instrument but also an increase or decrease of market volatility, etc. Arbitrage strategies, employed mainly by institutional investors, are a special variety of investment strategies.