As Many as 70% of Buy-Side Investors Expect Their Futures Trading Volumes to Increase during Next 12 Months, Says TABB Group

Buy-Side Firms Say Futurization of Swaps will Gain Additional Traction in 2015, that Rising Volatility Positively Influences Futures Trading Activities

NEW YORK & LONDON--()--With the derivatives markets working through new rules, market structure changes and a wave of uncertainty, many across the capital markets industry believe the futures markets will benefit. To learn more, TABB Group conducted a survey in September 2014 of more than 40 traditional asset managers (long only, mutual funds, pension funds and insurance companies), hedge funds, commodity trading advisors (CTAs) and proprietary trading firms on recent trends impacting futures exchanges and futures commission merchants (FCMs).

As many as 70% of the participants told TABB they expect their listed futures trading volumes to increase over the next 12 months with 82% saying that growth will be driven by increased market volatility and rising interest rates. According to TABB principal Matt Simon, head of futures research, and research analyst Luther Zhao, co-authors of “Futures Industry Poll: The Buy-Side Assessment,” the impact of Federal Reserve policy will result in increased interest rate futures volumes with the potential to change underlying cash bond market participation.

“These buy-side firms also see expanding their use of futures in equity-related products and expect to increase their activity in equity options by as much as 89% and ETFs by 65%,” says Simon.

Other key results include:

  • Futurization of swaps will gain additional traction in 2015 with 29% of those surveyed expecting to use exchange-traded swap futures as an alternative to traditional OTC swaps.
  • The buy side needs increased regulatory guidance from their FCMs to understand the impact of new rules and how they will affect overall trading operations in the future.
  • Buy-side firms are generally not putting pressure on FCMs to lower execution rates but there is rising pressure from asset managers wanting lower clearing rates.

The 14-page, 21-exhibit report is available for download by TABB Group Research Alliance Derivatives clients and qualified media. For a copy of the Executive Summary or to purchase the report, write to info@tabbgroup.com.

About TABB Group

Based in New York and London, TABB Group is the research and consulting firm focused exclusively on capital markets, based on the interview-based, “first-person knowledge” research methodology developed by Larry Tabb.

Contacts

martinrabkinink
Martin Rabkin, 914-420-5739
mrabkin@martinrabkinink.com

Release Summary

As Many as 70% of Buy-Side Investors Expect Their Futures Trading Volumes to Increase during Next 12 Months, Says TABB Group Survey

Contacts

martinrabkinink
Martin Rabkin, 914-420-5739
mrabkin@martinrabkinink.com