Asia’s commodity derivatives markets are being used somewhat differently than they were a few years ago, and the shift shows up more clearly in the position data than in the headline volumes.
The contracts were built, for the most part, around participants hedging an underlying exposure they already carried, and that remains the foundation of the market. Increasingly, though, the same contracts are also being traded by funds, proprietary desks and specialist trading firms running derivatives books of futures, options and OTC instruments held as positions in their own right.
Singapore Exchange reported total commodities volume up 21% year on year across its 2026 financial year, reaching 78.8 million lots. Average open interest rose 24% to a record 4.2 million lots. The exchange has attributed the growth to increased hedging and trading activity, alongside continued expansion of its client base.
Volume records can be set in a single volatile week, since a market can trade heavily, close out, and end the period roughly where it started.
Open interest works differently, because it counts what remains open at the end. A record there suggests positions were opened and held, and that exposure taken on during the year was still in place when the year finished.
The distinction has some bearing on how risk is managed. A market that cycles positions around events tends to carry risk in bursts, whereas a market that holds them carries it more continuously, and has to value and fund that risk in the periods between.
This is not confined to Singapore. Across commodity derivatives markets this year, a similar combination has been visible: volatility arriving in concentrated periods, margin requirements repricing alongside it, and exposure remaining on the book after the volatility has passed. We looked at that pattern in more detail in our H1 2026 Risk Report.
Alongside hedging, the exchange points to continued expansion of its client base as a driver of growth.
This changes the composition of a market rather than simply its size. A contract used to hedge an underlying exposure behaves differently from one also traded for relative value, for basis, or as an expression of a view. Liquidity tends to improve. So does the range of strategies the market has to support, and the range of exposures its participants carry.
Financial participants also operate on different horizons, and they measure risk differently. A derivatives book held for its own sake needs valuation, exposure and margin visible on the book itself rather than against something underlying it.
We extended margin calculation to SGX during 2026, alongside existing coverage across major exchanges including ICE, CME and LME. That was a product decision made because the venues our clients need in one view have been changing.
Trade capture runs more widely still, across major exchanges in the region including SGX and SHFE, so positions are captured automatically as they execute regardless of which of those venues a desk trades.
We work with commodity trading firms, hedge funds and CTAs running derivatives books across futures, options, exchange-traded and OTC instruments. The pattern behind that decision is consistent: books that once sat on one or two venues now sit across several, and the total matters more than any individual leg.
As more participants hold positions across more venues, the practical question becomes how current the risk picture is at any given moment.
It is a question with a reasonably specific answer on any desk, since for each venue on the book the margin figure is either calculated or estimated, and it carries a time. Most desks know this for their primary venue, and rather fewer know it for the one they added most recently.
Margin, value at risk, exposure and mark to market sit in one place in the Loqsea platform, calculated across the exchanges a desk trades and aggregated to a single total by book. Margin recalculates automatically at an interval the desk sets, on demand at any point in between, with each exchange leg timestamped so its age is visible alongside the number.
None of that changes what a market does. It changes how quickly a desk can see where it stands within one.
Index inclusions, contract launches and volume records tend to be treated as milestones, though their more durable effect is usually on participation: who trades a market, how long they hold, and what they need in order to do it well.
On the evidence of the past year, Asia’s commodity derivatives markets look to be some way into that shift rather than at the start of it, with positions held for longer by a broader set of participants and across more venues than before. That seems to us a market worth understanding properly.
Members of the Loqsea team will be in Singapore for APPEC 2026, from 7 to 10 September at the Raffles City Convention Centre. If you would like to talk through how your desk sees exposure across venues, you can arrange a time in advance.
Loqsea is a cloud-based commodity trading and risk management platform built for commodity derivatives desks. Automated trade capture, real-time positions and P&L, and blotter reconciliation with mismatch detection. Used by commodity trading firms, hedge funds and CTAs across energy, metals, agriculture and freight derivatives markets. Book a demo with our team to find out more.
