The UK has consolidated its position as the leading global derivatives center, accounting for 43% of turnover in the over-the-counter (OTC) market in April 2007, the same as in April 2004. The new edition of IFSL’s Derivatives report indicates that the US, with nearly a quarter of turnover, is the only other major center for trading of OTC derivatives.
London is also a major centre for niche OTC derivatives markets, such as credit, energy and freight derivatives, which have grown rapidly in recent years. Credit and freight derivatives both doubled in 2006, with 40% of credit derivatives transacted in London and the freight derivatives market also largely based in London.
London remains a diverse center for exchange trading. Liffe is the second largest exchange worldwide, accounting for 25% of international exchange-traded turnover by value, exceeded only by the Chicago Mercantile Exchange with 46%. Liffe is the leading exchange in the trading of short-term euro interest rate contracts. More than 95% of international business in non-ferrous metal futures is transacted at the London Metals Exchange, while nearly a half of global crude oil futures are traded at ICE Futures Europe. London is also an important source of remote trading, with 46% of Eurex trades originating from the UK in the first nine months of 2007.