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04 December 2023

Derivatives deals at DGCX rise 31.6% to 1.5m contracts

Pure gold casting grain. Gold prices have jumped in 2010. (AFP)

By Staff Writer

Derivatives contracts on Dubai Gold and Commodities Exchange (DGCX) surged 31.6 per cent last year to 1.5 million contracts compared with 1.142 million contracts reported in 2008.

The total value of derivatives contracts on the exchange in 2009 reached $79 million (Dh290m).

Currencies and crude oil contracts were the key drivers for the rise in annual volumes as currencies recorded a 132 per cent increase in 2009 compared with 2008.

Volume for crude oil futures also jumped140 per cent last year.

"DGCX's launch and progress was a timely occurrence for this region. The volatility in global markets and the tightening of credit rendered risk management, security and market transparency a priority among investors. The record annual volume on DGCX indicates that the Exchange is continuing in its growth path, offering the distinct advantages of regulated on-exchange trading and clearing," said Ahmed bin Sulayem, Chairman of the DGCX.

Average daily volume reached 5,921 contracts in 2009, an increase of 30.6 per cent compared with 2008. Since inception in November 2005, DGCX has seen trading of over 4.1 million contracts with a value in excess of $185 billion.

Monthly volumes on DGCX in December was 181,105, an increase of 529 per cent compared to volumes in December 2008.

December volume included 75,591 gold, 89,123 currency and 10,083 WTI futures contracts.

Y-o-y volumes of currency, crude and gold futures grew by 524 per cent, 509 per cent and 489 per cent respectively in December.

"In four years, the Exchange's portfolio has grown quickly to include the key economic indicators of precious metals, energy and currencies on one trading and clearing platform. The increase in year on year volumes is an encouraging achievement and confirms that our offering meets the requirements of market participants. We are confident that there is significant potential to grow existing contracts and launch new products, to further capture market opportunities and liquidity in the Middle East and beyond," said Eric Hasham, CEO of DGCX.

In 2009, the exchange focused on improving liquidity, tightening prices and educating participants to better understand the trading and price risk management benefits of derivatives. On February 27, 2009, for the first time, volume for Euro/Dollar futures touched almost 7,000 contracts valued at $427 million. August 7, 2009, saw the highest daily volume ever recorded for all currency futures at 7,655 contracts, valued at $583.86m.


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