Derivative trades rose 15 percent to $46.8 trillionDerivative transactions by financial institutions in Korea rose 15.3 percent last year from a year earlier due to increased contracts for stock index options, the nation’s top financial watchdog said yesterday.
According to the Financial Supervisory Service, the turnover of derivatives was 44,291 trillion won ($46.8 trillion) in 2006, compared with 38,427 trillion won the previous year.
Trades in exchange-based derivatives rose 14.3 percent annually to 39,345 trillion won due to a 14.6 percent jump in Kospi 200 options trading to 34,600 trillion won, the watchdog said.
The Kospi 200 consists of 200 stocks selected on the basis of market value and trading volume. Over-the-counter derivatives also climbed 23.3 percent to 4,946 trillion won last year.
As of the end of 2006, the outstanding amount of derivatives trading reached 2,628 trillion won, up 52.3 percent from the previous year mainly because interest rate swaps surged 71.5 percent annually to 1,245 trillion won.
Income from the sale of derivatives by financial institutions, comprising domestic and foreign banks and securities firms here, jumped 31.1 percent on-year to 1.4 trillion won.
The surge was attributable to a 103 percent increase in brokerages’ gains from equity-linked derivatives to 219 billion won largely due to a 1,717.6 percent leap in foreign brokerages’ income.