Last year, for example, the Korea Stock Exchange’s Kospi 200 options and futures contracts were two of the most actively traded listed derivatives globally. The Kospi 200 options contract grew 131% in terms of average daily trading volumes by October last year. This surge in volumes has commonly been attributed to the participation of retail investors in the regulated derivatives market.
Hong Shik Kim, head of trading and derivatives at Goodmorning Shinhan Securities, which obtained an OTC derivatives licence earlier this month, believes the ELN market could be worth $8.5 billion a year, while this year alone a South Korean warrants market could generate notional volumes worth $5 billion. “I think [the change in regulations] will have a huge impact on the retail investor market,” he said.