Global OTC Derivatives Market — Notional Outstanding

The global over-the-counter derivatives market reached $845.7 trillion in notional outstanding as of June 2025 — a figure that exceeds global GDP by more than eight times over and represents the single largest financial market by reference amount. The H1 2025 reading marks a 15.9% increase from $729.5 trillion a year earlier, driven primarily by a $87 trillion expansion in interest rate derivatives as financial institutions repositioned duration exposure through the global rate cutting cycle. The previous all-time high of $710.1 trillion was set in H2 2013; the June 2025 figure is 19% above that prior peak.

Notional outstanding is not a measure of loss exposure. The gross market value of all OTC derivatives as of H1 2025 was $21.8 trillion — 2.6% of the notional figure — representing the actual mark-to-market replacement cost if every contract were unwound simultaneously. After counterparty netting, net credit exposure falls further to a fraction of that amount.

Interest rate derivatives remain the dominant instrument class at $665.8 trillion, representing 78.7% of total notional. This reflects the fundamental economics of global capital markets: every multi-year fixed-rate bond, every variable-rate corporate loan, and every cross-border funding transaction creates a natural hedge demand that is overwhelmingly expressed through interest rate swaps and forward rate agreements. Foreign exchange derivatives — the second-largest category at $155.2 trillion — capture the hedging requirements of the $7 trillion daily spot FX market, where importers, exporters, asset managers, and central banks manage currency exposure through forwards and FX swaps with tenors from overnight to multi-year. Credit default swaps stood at $11.3 trillion in H1 2025, a fraction of their $68.7 trillion peak in H1 2008, reflecting compression from compression trading and the waning of the structured credit boom.

• Dataset: BIS WS_OTC_DERIV2, semi-annual survey of major derivatives dealers globally
• Reporting basis: Net-gross (single-counted) — each contract is counted once rather than for both counterparties; DER_BASIS=C in the SDMX key
• Instrument coverage: Interest rate (forwards, swaps, options), foreign exchange (spot excluded), equity-linked, commodity, and credit derivatives
• Currency: All values reported in USD millions; converted to USD trillions (÷ 1,000,000) for this page
• Temporal coverage: 1998 H1 through 2025 H1; reporting country coverage: all BIS reporting countries (5J code)
• Central clearing: The BIS reports that approximately 75–80% of interest rate derivatives notional is now cleared through central counterparties, up from near-zero before 2009

The post-2008 trajectory of the market illustrates the effect of regulatory reform on structure, if not on scale. The 2009 Pittsburgh G20 commitment to mandatory central clearing — implemented through Dodd-Frank Title VII in the US and EMIR in the EU — did not reduce the volume of derivatives activity. Notional outstanding was $598 trillion at the 2008 year-end trough and has grown by 41% in the 17 years since. What changed fundamentally was counterparty risk architecture: CCP clearing for standardised swaps means that dealer default no longer propagates bilaterally across the market, as it did when Lehman Brothers’ derivatives book required a multi-month unwinding process across hundreds of counterparties. The residual risk concentration in a small number of systemically important CCPs — LCH SwapClear alone clears the majority of global interest rate swap notional — has made CCP stress testing and default waterfall adequacy the central financial stability concern in derivatives markets.

For fixed income portfolio managers and rates desks, the H1 2025 expansion in notional outstanding is a direct indicator of the volume of curve repositioning that occurred as major central banks pivoted from hiking to cutting cycles. Large moves in swap notional typically precede or accompany significant duration shifts in institutional bond portfolios — the $87 trillion year-on-year increase in IR derivatives between H1 2024 and H1 2025 is consistent with the scale of rate risk transfer that characterised 2024’s easing cycle across the Fed, ECB, and Bank of England.