Trading volume of derivatives plummeted in April in parallel with the sluggishness of the underlying market, showing an increasingly close link between these two markets (Photo: cafef.vn)

Hanoi (VNS/VNA) -💮 Trading volume of derivatives plummeted inApril in parallel with the sluggishness of the underlying market,showing an increasingly close link between these two markets.

When the underlying market falls, investors will theoretically seekopportunities to make profit on the derivatives market, because itallows them to earn profits even as the underlying market declines.

The liquidity of the derivatives market often soars when the underlying marketfluctuates. Thus, the derivatives market is an effective solution to retaininvestors, helping avoid a situation in which they withdraw from the stockmarket and cause collapses. But things moved in reverse in April.

According to statistics from the Hanoi Stock Exchange (HNX), in April thisyear, along with the decline of the stock market, transactions on thederivatives market fell sharply compared to March. The average tradingvolume decreased by 40.45 percent to about 80,700 contracts per session.

The session on April 22 had the lowest trading volume during themonth –also the lowest level since the beginning of theyear – reaching nearly 56,300 contracts. The session on April 9 hadthe highest trading volume, reaching over 103,900 contracts.

Notably, in the last trading session of the month on April 26, thederivatives market had an impressive session. Total trading volume for thesession was 102,677 contracts – only slightly higher than theaverage figure of the previous month, 100,000.

The average trading value of the VN-30 Index basket in April reached just 1.4trillion VND (59.9 million USD), down 30 percent compared to the middle ofMarch. The trading value of futures contracts on April 19 reached nearly950 billion VND, equal to 50 percent of the average trading value of VN-30basket in March.

The open interest (OI) – the total number of open or outstanding optionsand futures contracts – decreased by 10.93 percent from the previousmonth. By the end of April 29, the OI volume of the whole market reached 21,267contracts.

🗹 The number of derivatives trading accounts continued to increase. At theend of April, the figure reached 70,112 accounts, up 4.04 percent over theprevious month.

In April, the transactions carried out by individual domestic investorsaccounted for a large proportion but still decreased significantly compared tothe previous months, standing at 92.9 percent of the total derivatives tradingvolume.

The proportion of transactions carried out by domestic institutional investors(including self-trading) increased sharply, reaching 6.84 percent, 3.2 timeshigher than the previous month.

Excluding self-trading, the trading value of this group nearly tripled comparedto March, reaching more than 185,000 contracts, the highest level since theinception of the derivatives market.

♛ Transactions by foreign investors in April decreased according to the generaltrend of the stock market, reaching 8,165 contracts, equal to 60 percent of thenumber seen in the previous month, accounting for 0.27 percent of the totaltrading volume of the whole market.-VNS/VNA