Derivatives Market Size, Share, Growth, and Industry Growth by Type (Financial and Commodity), By Application (Hedging and Speculative Arbitrage), Regional Insights, and Forecast To 2032

Updated On: 01 April 2024

Derivatives Market REPORT OVERVIEW

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The global derivatives market size was USD 21980 million in 2020 and market is projected to touch USD 59170 million by 2032, at a CAGR of 8.6% during the forecast period.

The derivatives market is a kind of financial instrument. They are generally expressed as an agreement between two entities. Some examples of derivatives are futures contracts or options. Typically, it includes futures, forwards, swaps, and opportunities. They are determined by the prices of other basic products. Also, a transaction that can be delivered at a future time does not require to deliver immediately. Derivatives play an important and useful role in risk management and hedging.

Growing demand for price volatility is expected to boost market growth. Increasing changes in demand and supply influence product demand. Rapid industrialization of many underdeveloped countries is estimated to bring new dimensions to the market. Growing need for globalization is projected to drive market growth. Rising technological developments in financial sectors are projected to drive market growth. Also, increasing advanced financial theories are predicted to propel market growth in the coming years. 

COVID-19 Impact: Closer of Financial Institute to Hamper Market Expansion 

COVID-19 pandemic triggered a massive increase in volatility. Shutdown of industries and financial institutes reduced service demand. Unemployment during pandemic declined economic growth. Fluctuation of prices during pandemic reduced market growth. Uncertainty in trading activities hampered market growth. Rising demand for market crisis for real hedging halted service adoption.

On the contrary, post-COVID-19, the market is expected to show positive growth due to the reopening of financial institutes. Upliftment of lockdown restrictions boosted service adoption. Market players adopted strategies to increase market growth. 

LATEST TRENDS

"Increasing Need for Price Determination to Foster Market Growth "

Growing need to determine the price of underlying asset is expected to increase market growth. Increasing demand for the associated derivative tend estimated to boost service demand. Growing demand for transferring risk from one investor to another is projected to drive market growth during the forecast period. Growing need to generate option ability is estimated to propel market growth. Further, increasing need to avoid payments of taxes is predicted to fuel service demand. Also, increasing advanced investment strategies are estimated to fuel market growth. Growing demand for clearing products is estimated to surge market growth. Rising technological developments in financial sectors are projected to drive market growth. Also, increasing advanced financial theories are predicted to propel market growth

Derivatives Market SEGMENTATION

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• By Type

Based on type, the market is divided into financial and commodity.

Financial is expected to be the leading part of segmentation type.

• By Application

Based on the application, the market is divided into hedging and speculative arbitrage.

Speculative arbitrage is expected to be the leading part of application segmentation.

DRIVING FACTORS

"Growing Demand for Swaps Contracts to Incite Market Growth"

Increasing demand for swaps contracts for better cash flows is expected to boost market growth. Rising demand to exchange fixed cash flow for a floating cash flow is projected to increase market growth. Growing need of the legal contract to replicate payoff of the assets is predicted to surge market growth. Increasing demand for efficient finance market is projected to drive market growth during the forecast period. Further, increasing need to transfer risk to another party is estimated to stimulate market growth. Higher demand for risk management tool is predicted to propel market growth. Low transaction cost of the contract is anticipated to fuel market growth during the forecast period. Growing need for relationship management between two parties is projected to drive market growth.

"Rising Demand for Market efficiency to Accelerate Market Growth  "

Increasing demand for efficiency of financial markets is expected to fuel market growth. Using derivate contracts helps to serve approximate commodity prices. Such benefits are estimated to surge market growth during the forecast period. The financial instrument helps to sell an underlying asset at a predetermined price. Increasing number of investments is projected to boost service adoption. Growing number of financial institutes globally is predicted to fuel derivatives market growth.

"Growth in Artificial Intelligence in Trading to Incite Market Growth"

Growing need for artificial intelligence in trading is expected to fuel market growth. Rising shift towards modern trends or derivatives is estimated to surge market growth. The presence of block chain artificial intelligence and robots in the financial market is predicted to accelerate market growth. Increasing demand for competent pricing tools is anticipated to accelerate derivatives market growth during the forecast period.

RESTRAINING FACTORS

"High Risk and Counter-Party Risk Associated with the Service to Hamper Market Growth"

High volatility of the services is estimated to reduce market growth. Sophisticated design of the contracts is predicted to reduce market growth. Possibilities of counter-party default are projected to restrict market growth during the forecast period.

Derivatives Market REGIONAL INSIGHTS

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"Growing Demand for Finance Marketing in Asia Pacific to Drive Market Share"

Asia Pacific is estimated to hold the largest part of derivatives market share due to increasing demand for finance market. Increasing need to avoid payments of taxes is predicted to fuel service demand. Increasing need for the legal contract to replicate payoff of the assets is predicted to surge market growth. Rising need for artificial intelligence in trading is expected to fuel market growth in the region. Growing demand for relationship management between two parties is projected to drive derivatives market growth. Further, increasing number of investments is projected to boost service adoption during the forecast period. Presence of major market players is estimated to accelerate market growth.

KEY INDUSTRY PLAYERS

"Leading Players Adopt Strategies to Stay Competitive"

The report covers information about the list of market players and their latest development in the industry. The information includes mergers, partnerships, acquisitions, technological developments, and production lines. Other aspects examined for this market include complete research on companies producing and introducing the latest products, regions they conduct their operations in, automation, technology adoption, generating the most revenue, and making a difference with their products.

List of Market Players Profiled

• Goldman Sachs (U.S.)
• Deutsche Bank (Germany)
• Citi (U.S.)
• J.P. Morgan (U.S.)
• Morgan Stanley (U.S.)
• Bank of America (U.S.)
• Credit Suisse (Switzerland)
• Nomura (japan)
• ANZ (Australia)
• BNP Paribas (France)
• Wells Fargo (U.S.)
• Truist (U.S.)
• Societe Generale (France)
• Yongan Futures (China)
• CITIC Securities (China)
• GTJA (China)
• Haitong Futures (China)
• Ruida Futures (China)

REPORT COVERAGE

This research profiles a report with general studies that explain the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by examining the factors like segmentation, opportunities, industrial developments, trends, growth, size, share, restraints, and others. This analysis is subject to alteration if the key players and probable analysis of market dynamics change.