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FUTURES MARKETS :''Main article: Futures Exchange Futures exchanges, such as (BIS): {Link without Title} ) OVER-THE-COUNTER MARKETS Tailor made derivatives, that are not traded on a futures exchange, are traded on over-the-counter markets. These consist of Investment Bank s who have traders who Make Markets in these derivatives, and clients such as Hedge Fund s, Commercial Bank s, Government Sponsored Enterprises , etc. Products that are always traded Over-the-counter are Swaps , Forward Rate Agreement s, Forward Contract s, Credit Derivative s, etc. The total Notional Amount of all the outstanding positions at the end of June 2004 stood at $220 trillion. (source: BIS: {Link without Title} ) ................. NETTING Global: The notional outstanding value of OTC derivatives contracts rose by 36% from $197 trillion at end-2003 to $270 trillion in June 2005. Since end-2000, notional value has increased nearly threefold. Average daily global turnover rose from $764bn to $1508bn between April 2001 and April 2004. The UK reinforced its position as the leading derivatives center with its share of turnover rising from 36% to 43% during this period. Interest rate instruments remain the key driver of global trading, accounting for 76% of notional value. Derivatives based on foreign exchange contracts also form an important sphere of activity as do equity-linked and commodity contracts. Credit, energy, metal and freight derivatives have grown rapidly in recent years. The euro and the US dollar dominate interest rate derivatives worldwide with 37% and 35% shares respectively based on notional value in June 2005. Turnover data for April 2004 indicated a rather higher share for euro-based derivatives trading. Financial institutions such as hedge funds, mutual funds, insurance companies and smaller banks have become much bigger users of derivatives. {Link without Title} US: Figures below are from September, 2005 {Link without Title}
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