NYSE Euronext in derivatives trading boom

EXCHANGE group NYSE Euronext yesterday revealed the growing importance of its derivatives business as it announced a 27 per cent year-on-year rise to 9.5m contracts traded per day during January.

In contrast its traditional equities business suffered, with US volumes falling 14 per cent to 1.6bn shares a day over the same period.

The improvement in the derivatives business – which suggests a potential turnaround in trading volumes after a sluggish end to 2012 – was largely driven by a 64 per cent rise in the popularity of fixed income products.

This increase explains why upstart derivatives trading business IntercontinentalExchange (ICE) agreed to pay $8.2bn (£5bn) at the end of December to buy NYSE Euronext and take control of its subsidiary Liffe, the second-largest futures exchange in Europe.
Yesterday’s figures reveal that the average daily volume of European derivatives traded through the full-service Liffe platform rose a hefty 43.5 per cent on last year, with ICE convinced that further growth is on the way.

Meanwhile NYSE Euronext yesterday confirmed it is preparing to spin-off the Paris-based Matif wheat futures market as part of the forthcoming takeover deal, which is due to complete in the second half of this year.

ICE has made no secret that it has limited interest in equities markets and it is also expected to dispose of NYSE Euronext’s stock exchanges in France, Portugal, Belgium and the Netherlands.

Last week NYSE Euronext’s results showed revenue fell 11 per cent to $562m during the final three months following a slump in trading volumes.