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Alternative Market Briefing

South Korean derivatives market doubles to $27tn in four years

Tuesday, August 14, 2012

Bailey McCann, Opalesque New York: The South Korean derivatives market has evolved into the worlds largest in terms of trading volume accounting for roughly 20% of the global total and doubling in value in 2011 to 30 quadrillion won, or approximately US$27tn, according to new research from Celent. Despite the significant spike in activity, the market still has opportunities for growth - the nation's OTC derivatives trading volume possesses a meager 0.19% of the global pie, lagging significantly behind other world markets.

2011 was also the year in which South Korea clinched the top seat as the leading listed derivatives market with volume reaching 3.9bn transactions, outpacing by a wide margin the US-based CME Group which currently holds second place in terms of listed derivatives trading volumes. While the activity continues to grow steadily in both listed derivatives and OTC transactions, South Korean regulators have recently been stepping in to monitor and moderate this activity. So far, new regulations haven't been overtly limiting, but they do add to the list of factors to be considered by funds and managers in this market.

This rate of growth also significantly outpaces other, arguably more popular emerging markets, "derivatives transaction growth in emerging economies such as India and Brazil is rising at a remarkable rate, yet their transac......................

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