Published on: December 10, 2019
Derivatives refer to financial securities whose value is derived from underlying assets. Several businesses and enterprises use derivatives primarily to hedge risks and reduce uncertainty about future prices. The global derivatives market has been categorized as a part of the global financial exchanges and data market. The global financial exchanges and data market include providers of financial exchanges for securities, commodities, derivatives and other financial instruments, and providers of financial decision support tools and products including rating agencies.
North America is expected to dominate the global derivatives market by region during the forecast period, driven primarily by the rapid penetration of technology in the financial services sector in the region. Trends such as the rising prominence of derivatives analytics are expected to characterize market growth during the forecast period.
Many factors are expected to influence growth in the global derivatives market during the forecast period. Our analysis identifies the following factors to be driving the growth of the global derivatives market:
The growing adoption of technology such as big data in industries such as agriculture and real estate have aided the growth of the global derivatives market. Additionally, the rapid penetration of internet infrastructure and mobile devices enables vendors to advertise and promote directly through online platforms. Technology software and tools enable vendors to analyze data about prospective customers such as demographics, which can be used to customize and personalize advertisements and marketing strategies and make informed business decisions. The adoption of technology in industrial-decision making is expected to boost the growth of the global derivatives market during the forecast period.
Derivatives are increasing in use in emerging markets around the world to ensure minimal impact of uncertain factors. For instance, commodity futures are adopted as an effective way to ensure against seasonal shortfalls in agricultural production. Derivatives can be effective in raising capital in developing countries. Derivatives are gaining prominence as a viable tool to boost the creation of capital, with derivative markets highly attractive to global investors.
Meanwhile, the vendors operating in the market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:
The slow growth in the gross domestic product (GDP) and jobs over the last few years have impacted the demand for the global derivatives market. Factors such as rapidly rising population and resource-related constraints in existing urban cities expected to continue to challenge the growth of the global derivatives market during the forecast period.
The global derivatives market is dependent on related macroeconomic factors. These factors influence a trader's decisions and ultimately determine the value of a currency at any given point in time. The economic health of a country is a key factor in the value of underlying derivatives. Factors such as political landscapes, international trade relations, and the liquidity of capital markets are expected to contribute to the volatile nature of the global derivatives market during the forecast period.
The global derivatives market has been segmented into the following:
The global derivatives market is fragmented with the presence of several international and regional players. We provide a detailed analysis of around 25 vendors operating in the global derivatives market, including some of the prominent vendors such as Cantor Fitzgerald LP, CMS, First Capital Securities Co. Ltd., UBS Group AG, Deutsche Bank, and Shenwan Hongyuan Securities Co. Ltd. Mergers, acquisitions and divestitures are among the strategies adopted by manufacturers in the global derivatives market.
Backed with competitive intelligence and benchmarking, our global derivatives market research report is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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