Global OTC Derivatives Surged to $845.7 Trillion -Report
Global over-the-counter (OTC) derivatives notional outstanding grew to $845.7 trillion at the end of June 2025, a 15.9% rise compared to mid-year 2024 and a 20.9% increase relative to year-end 2024, International Swaps and Derivatives Association (ISDA) said in a report.
The latest data from the Bank for International Settlements (BIS) over-the-counter derivatives statistics show an increase in notional outstanding of OTC derivatives during the first half of 2025 compared to the first half of 2024.
According to ISDA, Notional outstanding rose across all major asset classes, including interest rate derivatives (IRD), foreign exchange (FX), equity, and commodity derivatives.
The association said heightened uncertainty about trade, monetary policy outlook, and geopolitical developments supported increased hedging activity, contributing to higher notional outstanding across major derivatives asset classes.
“After declining in 2023 and 2024, gross market value and gross credit exposure also increased in the first half of 2025.
“Global OTC derivatives notional outstanding grew by 15.9% in the first six months of 2025 compared to the same period in 2024. Gross market value increased by 29.5%, while gross credit exposure, which represents gross market value after netting, rose by 5.1%.
“Close-out netting continued to significantly reduce mark-to-market exposures, lowering total exposure by 86.4% at mid-year 2025. Credit exposure was further mitigated through collateral posted for both cleared and non-cleared transactions”.
Initial margin (IM) posted for cleared IRD and credit default swaps (CDS) at major central counterparties (CCPs) reached $430.4 billion at mid-year 2025 compared to $364.4 billion a year earlier, ISDA said in the report.
The association said this growth partly reflects a seasonal pattern, where notional outstanding typically rises in the first half of the year and declines in the second half.
While equity and credit derivatives posted higher year-on-year growth rates in percentage terms, the overall increase in notional outstanding was primarily driven by interest rate and FX derivatives given their significantly larger size in absolute terms. It noted.
The report stated that IRD notional outstanding increased by 15.0% to $665.8 trillion at mid-year 2025 versus $578.8 trillion at the end of June 2024, while notional outstanding in FX derivatives grew by 19.5% to $155.2 trillion from $129.9 trillion.
Equity and commodity derivatives notional outstanding increased by 19.7% and 7.3% and totaled $10.4 trillion and $2.6 trillion, respectively. Credit derivatives notional outstanding rose by 22.9% to $11.3 trillion from $9.2 trillion.
The gross market value of OTC derivatives grew by 29.5% to $21.8 trillion at mid-year 2025. Gross market value equaled 2.6% of notional outstanding as of end-June 2025 compared to 2.3% the year before.
The gross market value of IRD contracts rose by 25.5% to $15.0 trillion from $12.0 trillion, while the gross market value of FX derivatives grew by 45.9% to $5.4 trillion from $3.7 trillion.
Gross credit exposure of OTC derivatives, which is a more accurate measure of counterparty credit risk, increased by 5.1% to $3.0 trillion and accounted for 0.4% of notional outstanding.
As a result of close-out netting, market participants reduced their mark-to-market exposure by 86.4% at mid-year 2025 (see Chart 4). The remaining gross credit exposure is further reduced by the collateral that firms post for cleared and non-cleared derivatives transactions. First Holdco Gains 12.8% as Investors Tag Along with Otedola
