Futures, options volume jumps on signs Fed will reduce stimulus

CHICAGO, June 19 Wed Jun 19, 2013 6:52pm EDT

CHICAGO, June 19 (Reuters) - U.S. futures and options volume in May climbed 11.6 percent from a year earlier amid signs that Federal Reserve policymakers may pare back their massive monetary stimulus, according to analysts and newly released industry data.

The Futures Industry Association said on Wednesday that U.S. volume last month jumped to 761 million contracts from 682 million contracts in May 2012. Overseas volume was not available.

Trading has rebounded since global volume dropped 15.3 percent in 2012 as the outlook for unchanged interest rates kept traders on the sidelines.

Global futures and options volume during the first quarter edged up 0.5 percent from a year earlier to 5.41 billion contracts, according to the association.

Futures-only volume during the quarter rose 21.2 percent from the previous year to 3.06 billion contracts, and options volume fell 17.9 percent to 2.35 billion, it said.

During the first quarter, interest rate-based futures and options volume rose 8.4 percent from a year earlier to 848 million contracts, according to the association.

"I would be surprised if the second quarter didn't beat the first quarter," said Mike Zuzolo, president of Global Commodity Analytics & Consulting.

Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. economy is expanding strongly enough for the central bank to begin slowing the pace of its bond-buying stimulus later this year.

The Fed has held overnight interest rates near zero since December 2008.

"As talk and speculation about what rates might do kind of heats up, that's the kind of volatility that's good for this interest-rate complex," said Gaston Ceron, equity analyst for Morningstar.

CME Group, the world's largest futures exchange operator, on May 29 set a single-day volume record with 26,947,300 contracts trading across all asset classes. That surpassed the previous record of 25,734,651 contracts from August 9, 2011.

CME interest rate futures and options on May 29 reached a high of 19,417,635 contracts, topping the previous record of 17,164,758 contracts from February 27, 2007.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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