The volume of derivatives trading in South Korea surged in the first half of this year amid the country’s extended stock market rally.

According to the Financial Supervisory Service on Friday, the country’s total derivatives market turnover reached 20,047.3 trillion won (US$18.4 trillion) in the January-June period, up 8.6 percent from the same period last year.

Derivatives trading by securities companies soared 57.9 percent on year to 11,617 trillion won, followed by banks with a 32.1 percent on-year jump to 6,435 trillion won. Trading by trust companies increased 2.6 percent to 528 billion won and that of insurance firms rose 0.6 percent to 119 trillion won.

The surge was mainly driven by the Korean stock market that has been on a bull run despite various risks including growing protectionism on the trading front and heightened geopolitical risk. Over the cited period, the country’s stock-related derivatives trading volume climbed 19.5 percent on year to 10,455.3 trillion won. In particular, trading by securities firms jumped a whopping 86.9 percent on year to 909.1 billion won.

Market analysts expect derivatives trading in the second half of this year would continue to rise after the country’s main stock index Kospi has achieved new milestones topping the 2,400 mark for the first time in July and 2,500 in October. The extended rally in the stock market would allow derivatives trading turnover for full 2017 to reverse from the downward trend of recent years, market analysts said.

Last year’s derivatives trading volume amounted 39,652 trillion won, falling 11.2 percent on year and extending years-long losing streak.

By Jin Young-tae and Cho Jeehyun

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