FIA Says Political Instability Driving Derivative Growth in 2025

According to a survey of brokers, trading firms and exchanges, global derivatives market trading will rise in 2025, but "mainly because of political instability and geopolitical conflict," rather than economic fundamentals.

The survey, commissioned by FIA, highlighted data on (i) the main drivers for growth in trading volume, (ii) the implementation of Treasury Central Clearing Rules, (iii) prediction markets and (iv) technology trends. 

On drivers for growth in trading volume, 82% of market participants said that political instability and geo-political conflict are most likely significant sources of growth in global trading of derivatives over the next two years; while only 13% chose supply chain disruptions. 

On the US Treasury Clearing Mandate, a slim majority said that the market will benefit from having access to more than one CCP.  As to the benefits of the clearing mandate, the most popular answers included cross margining efficiencies, the ability to select a margin methodology and better balance sheet treatment. 

The FIA noted that the popularity of prediction markets increased dramatically in 2024. In response to what the most likely long-term impact of these markets on the futures industry may be, 39% of participants said predictions markets are "an interesting, but minor sideshow compared to the mainstream futures markets" and a significant number also said prediction markets would have a negative impact on the futures industry.  

On technology trends, 35% of participants said the use of generative AI has the greatest potential to be a game changer for trading and clearing workflow in the derivatives industry over the next five years, with 32% choosing the use of tokenization in collateral management.