Global derivatives trading reached a record high in the first quarter, driven by a shift toward options for risk management amid geopolitical uncertainty. FIA data show a 38.8% increase in exchange-traded derivatives volume, with options volume up 39.7%. "This is an institutional market ... and it reflects a change in behavior among hedgers in how they want to cover their risks," says Will Acworth, global head of market intelligence at FIA. "Options actually provide a very cost-effective way to hedge when you really have no idea what the outcome might be."

Top banks in the US and UK have expanded their balance sheets by $1.3 trillion in the past two quarters, driven by regulatory easing, according to Alvarez & Marsal. US banks are expected to grow assets by $2.5 trillion, while UK banks might see a $400 billion increase. Meanwhile, EU banks face stricter capital requirements that could reduce their balance sheet capacity by €1.3 trillion.

The rapid expansion of hyperscaler debt has fueled an extraordinary rise in demand for credit derivatives, particularly credit default swaps. Banks, seeking to manage growing exposure to tech giants and unlock further lending capacity, are purchasing record volumes of CDS protection. This demand is driving the cost of CDS on hyperscalers to levels well above those typical for their high credit ratings. CVA desks are among the main drivers, using derivatives to navigate credit limits and hedge exposures linked to both direct loans and cross-currency swaps.

Coinbase has strategically shifted from being a crypto-only exchange to positioning itself as an "everything exchange" by expanding its product suite to include equities, commodities, derivatives, and prediction markets. Leadership emphasized at the J.P. Morgan Global Technology, Media and Communications Conference that diversifying tradable assets is central to attracting both existing and new customers, ensuring engagement across varying market conditions.

Derivatives held by euro-area nonbank financial institutions reached record levels in Q4 of 2025, with claims rising 31.7% to $477.5 billion, and liabilities increasing 88.6% to $210.7 billion. The European Central Bank has noted the systemic risks posed by these derivatives, particularly those involving interest-rate contracts.

Shares of the Australian Securities Exchange fell Tuesday after flagging a sharp rise in 2027 expenses and capital spending linked to a regulator-driven technology modernization program. The exchange said costs and capex will climb materially over the coming years as it rebuilds core systems, even as underlying revenue continues to grow.

The SEC approved Nasdaq's proposed rule change to list cash-settled bitcoin index options, moving the QBTC product closer to launch pending additional approvals from the CFTC and Options Clearing Corp. The contracts would allow investors to trade and hedge bitcoin exposure through traditional options infrastructure, signaling deeper integration of digital assets into institutional trading and risk-management systems.

LCH has expanded its eligible noncash collateral to include offshore Chinese government bonds denominated in renminbi, aiming to provide greater flexibility for market participants. The move, approved by the Commodity Futures Trading Commission and pending Bank of England approval, reflects growing internationalization of Chinese fixed-income markets. LCH plans to include bonds from major multilateral development institutions as collateral.

The House Oversight and Government Reform Committee has launched an investigation into potential insider trading on prediction market platforms Polymarket and Kalshi, requesting documents to assess how they verify user identities and monitor suspicious activity. The investigation follows allegations from the Commodity Futures Trading Commission that a US Army member traded on nonpublic information on Polymarket.

The Commodity Futures Trading Commission has undergone significant changes under the Trump administration, particularly regarding prediction markets and cryptocurrency enforcement, write reporters Sharon LaFraniere and David Yaffe-Bellany. Former officials Caroline Pham and Brigitte Weyls played crucial roles in facilitating companies' ambitions in prediction markets, raising concerns about fair treatment of bettors and fraud prevention. Under Chairman Michael Selig, the CFTC has shifted from stringent enforcement to a more industry-friendly approach, reducing workforce and enforcement actions. This transformation has been influenced by the Trump family's ties to the crypto and prediction market industries, posing potential risks to consumers and the financial system.

Indonesia blocked access to prediction market platform Polymarket after wagers tied to President Prabowo Subianto's tenure gained traction online, with authorities classifying the service as illegal gambling. The move reflects broader regulatory scrutiny of prediction markets globally as governments raise concerns over gambling laws, political sensitivity and platform oversight.

The Securities and Exchange Commission has delayed a plan to grant broad exemptions for trading tokenized assets linked to stocks. The "innovation exemption" aimed to encourage trading of tokenized stocks through decentralized finance protocols, but the SEC's analysis highlights the potential for market fragmentation and reduced regulatory protection.

The Securities and Exchange Board of India plans to reinstate a dedicated commodity derivatives regulation department, reversing a 2021 merger as regulators seek renewed focus on the sector. The move follows industry calls for stronger policy attention and comes as Sebi advances reforms aimed at modernizing India's commodity derivatives market.