Futures Markets On The Rise Over 2016 Political Turmoil

There have been numerous political changes and uncertainties in the past 9 months. Two of the most important ones are the Brexit vote from June and the upcoming President of the United States of America (POTUS) vote in November. However, with all the speculation that has been going around, it seems that the best beneficiaries of this turmoil are the futures markets from around the world.

According to a recent study, the futures markets are experiencing a rise in both activity and number of contracts. The study reports that this activity is a direct result of the political events that have happened throughout the year, such as the Brexit vote and the upcoming POTUS election, but also due to the potential rise in interest rates scheduled for the near future.

Analysts report that contract volumes are expected to continue to rise, especially in the energy, metals, and commodities sectors. These sectors are already experiencing increases of more than 10% in contracts. Moreover, by the end of the year, the total number of contracts available on the futures market is estimated at around 3.6 million. This would be an increase of 12% over last year’s final report.

The same report shows that although the overall activity of the futures market dropped by 4.6% in the second quarter of 2016, it was actually 13.4% higher than that of the same period of 2015. Moreover, due to the results of the Brexit referendum held in June, the futures markets activity of that month was the 2nd highest ever recorded.

Although the Chicago Board Options Exchange (CBOE) Volatility index has spiked multiple times over the past 12 months, it currently resides at around 20, putting it below the historical average. Moreover, the report shows that the total equity capital market increased by 58% in August, compared to the same month of last year. The current volume stands at $57.9 billion.