The market’s interest in trading options on the 225-issue Nikkei average on the Tokyo Stock Exchange has dropped to its lowest in more than a decade amid waning demand for protection against volatility.
Total open interest on the blue-chip gauge plunged to 1.1 million contracts on Dec. 11, its lowest since May 2009, according to data compiled by Bloomberg. The figure was little changed at about 1.2 million contracts as of Wednesday. In October, trading volume for call and put options on the Nikkei slid to 14,428 contracts on Oct. 26, its lowest in 19 years.
The drop in demand follows a global equity rally that pushed the Nikkei to its highest since 1991 in November and helped the gauge break out of its range between 20,000 and 24,000 for the first time since 2017.