The Global Market for Exchange-Traded Derivatives: 21st Century Trends, Innovation and Failure

Abstract

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.