Moscow has been a boom town for derivatives, especially equity contracts – but the excitement turned to shock in October as the stockmarkets crashed and traders pulled out of the market. Agnieszka Troszkiewicz finds that the business has taken a serious knock, but participants are confident that the underlying market is sound and will recover next year.
If you want to demonstrate to a schoolchild the meaning of exponential growth, you need only produce a graph of the Russian derivatives market this decade. Driven by rapid economic growth and a boom in Russia’s banking and securities industry, the contracts traded on Moscow’s two exchanges have been one of the world’s hottest spots for futures and options specialists.
Trading volume almost doubled in 2004, more than doubled in 2005 and 2006, almost doubled in 2007 – and the first 10 months of 2008 were already...