Derivatives Dominate Markets as Volatility Risks Remain Front and Center

[etfs]

Derivatives remain the largest segment of global financial markets, with notional values reaching into the hundreds of trillions of dollars, far exceeding global economic output. Liquidity and tight spreads continue to drive investor demand, even as market structures evolve.

In crypto, derivatives account for an estimated 75% to 80% of total trading volume, amplifying both efficiency and risk. That leverage was on full display during the Oct. 10 liquidation event, when $19 billion was wiped out in a single day — a reminder of the volatility embedded in derivatives-heavy markets.

[madtrader]

Derivatives basically run the entire market now, for better or worse