The notional amount of outstanding derivatives contracts jumped to $693 trillion by the end of June from $633 trillion at the end of 2012, but part of the rise was due to increased trading through central counterparties (CCPs), the Bank for International Settlements (BIS) said.
When over-the-counter (OTC) derivatives trades are cleared through CCPs, the notional amounts reported to the BIS increases because one contract becomes two, said the BIS based on its semiannual survey of some 70 major derivatives dealers based in 13 countries.
In contrast to the rise in notional amounts, the gross market value of the OTC derivatives, or the cost of replacing all contracts at market prices, fell to $20 trillion end-June from $25 trillion end-2012.
Interest rate contracts are still the largest segment in the global OTC derivatives market, with notional amounts of $577 trillion.
But the use of derivatives varies depending on dealers, the BIS said.
Dealers in emerging markets tend to focus on managing foreign exchange risks with interest rate derivatives accounting for a much smaller share of their contracts compared with those dealers that are based in the largest markets and participate in the semi-annual survey.
In addition to its semiannual survey, the BIS also carries out a Triennial Central Bank Survey to capture the trading in foreign exchange, interest rate, equity, commodity and credit derivatives traded in OTC markets. Combined, the two surveys capture the positions of more than 400 dealers in 47 countries.
For full details of the BIS derivatives survey, please click on "OTC derivatives market activity in the first half of 2013."