The exchange said the derivatives market has become a risk-hedging tool for investors. — Viet Nam News
HANOI: The derivatives market has experienced stable growth with dynamic trading activities after six years in operations, according to the Hanoi Stock Exchange (HNX).
Aug 10 marked the opening of the derivatives market and its first product of the VN30 index futures contract.
The exchange said the derivatives market has become a risk-hedging tool for investors, which is reflected in the increases in trading volume on the market when the primary market fluctuates strongly.
It also helps ease the selling pressure on the primary market, stabilising investor sentiment, balancing the market and capping losses of the primary market’s benchmark index.
When the market tumbled due to the impact of the Covid-19 pandemic in 2022, the liquidity of the derivatives market soared by 43.8% over the previous year.
This was consistent with the general movements of the global derivatives market, when the global primary markets entered the downtrend, leading to the cash inflow into the derivatives market as demand for safe-haven increased.
According to HNX, the market size and liquidity of the VN30 index futures contract grew strongly at an average of 39% from 2018 to 2022.
Particularly, 2020 witnessed the highest growth rate of 79.9% over 2019, followed by the growth speed in 2022, up 43.8% year-on-year (y-o-y).
In the first seven months of 2023, the average trading volume reached 225,178 contracts per session, down 17.41% y-o-y, but still the second-highest average annual transaction, only after the record set in 2022.
In the last six years, the average growth of VN30 index futures contracts was 27.46%.
The derivatives market is also a profitable investment channel for investors.
With two-way trading and being able to buy and sell continuously during the session, investors can make profits even when the primary market plummets. — Viet Nam News/ANN
