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A year of the derivatives market consecutively marks new records

09:29 | 11/08/2018

VCN - 10th August 2018 marked a year of officially in operation, the derivatives market has achieved very positive results in transaction size as well as interests of investors. It contributed to further improving the operational structure of the securities market in line with international practices.

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10th August 2018 marked a year of the derivatives market officially in operation.

Trading volume is continuously increasing

As of 31st July 2018, Hanoi Stock Exchange (HNX) has successfully organized 227 trading sessions with 4 codes in accordance with international practices, including contracts with monthly maturity dates in the current month, next month, and the last two months in the next 2 quarters.

According to HNX, from the launch up to now, the derivatives market always maintained a growth rate with the trading volume in the following month higher than it was in the previous month. The growth rate of trading volume from September 2017 to July 2018 was 35% per month on average. Particularly, the trading volume has sharply increased from May 2018 so far, when the base market fluctuated sharply.

According to statistics, the number of new derivative trading accounts continued to increase with 153 new accounts per day on average. As of 31st July 2018, 39,631 derivatives trading accounts were opened, of which 11,225 were traded.

In addition, the derivatives market continuously set new records. On the first trading day of market launch, the market trading volume reached 487 contracts, then on 6th July 2018, it marked a trading volume of 164,872 contracts. Average trading volume increased sharply with 58,613 contracts per day in 2018, 5.3 times higher than it in 2017.

Remarkably, the price of future contracts fluctuated closely with the base market index. Specifically, if the futures contract has an maturity in June 2018, at the listing time in October 2017 and early 2018, when expectations for the base market increased, the contracts would be traded at a price higher than VN30 Index. However, when there is one month left to the maturity, the price of futures contracts has been close to the index. Investors are interested in short-term contracts to prevent fluctuation risks of the base market.

Statistics of the HNX also showed that the OI volume has been growing since the market was in operation and gained 16,858 contracts on 31st July 2018, 2.1 times higher than that was in the end of 2017. On 25th July 2018, the OI volume marked the highest value with 18,569 contracts. That showed that the attractiveness and interest of investors in the stock market is increasing.

According to many experts, in addition to creating new investment products for public investment, the derivatives market also brings expectations as a tool to prevent risks for the base market. After a year of operation, the derivatives market has grown well and steadily, becoming an attractive investment channel as well as a tool to prevent risks for the base market

Information is publicized and transparent

Regarding the operation, many investors realized that since the market came into operation to this date, the information technology infrastructure serving the market has been smooth, stable and safe, with no big incidents. Information and data of market activities have been updated fully, promptly and accurately on the Department’s website, contributing to ensuring the transparency and best meeting the demand for access and exploitation of information for investors.

So far, the derivatives market has had 9 securities companies becoming market-making members and clearing members, up 2 members compared with the first phase. During the operation, the trading system at the member securities companies was stable, with no incidents, the link with the member companies and the VSD was stable and was not interrupted.

Notably, the monitoring on the derivatives market has been well implemented since it was put into operation with the full system of monitoring criteria and strengthened in the context of strong fluctuations on the base market over the past time. In addition, the HNX and HOSE have collaborated to develop a market monitoring mechanism to detect cases of manipulation of the base market for benefit from the derivatives market and vice versa.

According to a securities expert, the derivatives market is an effective solution to keep investors in the securities market when the base market falls. Actual data in international markets shows that when the base market loses points sharply, the liquidity in the derivatives market will increase sharply and vice-versa.

a year of the derivatives market consecutive marks new records Does the derivatives market attract capital from the base market?

VCN- While the base securities market is gloomy, the derivatives market continues to grow and attract investors.

It can be said that the inception and operation of the derivatives market is an important milestone of the Vietnam securities market and contributes to perfecting the structure of the Vietnamese securities market, increases investment products and promotes liquidity in the base market. After one year of operation, the derivatives market has become an attractive investment channel, a tool for investors to prevent risks when investing in the base market and has been of interest and welcomed by investors.

More than 90% of investors in the base market are individual investors, while those in the derivatives market are over 95%. Transactions of domestic investors (including self-trading activities of securities companies) accounted for 1.41% of the market’s total trading volume. Trading volume of foreign investors in the past year reached 23,305 contracts, equivalent to 0.12% of the market’s trading volume

By Thuy Linh/ Huyen Trang