Thank you Brexit, politics and the Fed: Futures trading at record pace

Trader's plan to make money off the Fed

As uncertainty over Brexit and the U.S. presidential race has jolted the markets through the year, there's been one clear beneficiary.

The futures markets are seeing activity like never before, and that's likely to continue through the rest of the year, according to a TABB Group analysis. In addition to the activity generated by June's Brexit vote, the upcoming election as well as the prospect of rising interest rates likely will move volumes even higher.

"Projected 2016 volumes are up across all market sectors, with the energy, metals, ags/commodities and equities sectors all tracking for double-digit increases," TABB senior analyst Tom Lehrkinder said in the report.

Futures trading volume is expected to hit 3.6 billion contracts for the year, a 12 percent increase over 2015's 3.2 million.

In addition to a surge in futures activity, TABB projects a sharp rise in options on futures trading. That category is expected to jump about 15 percent this year, also to a record.

Futures contracts require owners to buy or sell particular assets at a later date at set price targets. Futures options allow the owner the choice of whether to exercise the contract.

Futures activity actually declined from the first quarter to the second, dropping 4.6 percent to 882 million contracts. However, that was a big year-over-year jump of 13.4 percent.

Thanks largely to the Brexit turmoil, in which U.K. voters authorized a split from the European Union, June was the second-busiest month ever for futures.

Volatility by traditional measures has been muted for much the summer. The CBOE Volatility Index spiked in late-February amid the market upset over December's rate hike and concerns over China growth, and it moved higher again in late June amid the Brexit aftermath. But the index is now well below its historical average around 20.

Yet the various swings in markets have provided traders with opportunities.

The jump in futures volume comes amid signs of thawing elsewhere in markets.

Equity capital market volume surged last month to $57.9 billion, a 58 percent jump from the same period a year ago to account for the best August ever, according to Dealogic. The moribund initial public offering market saw nearly triple the volume it did in August 2015, though IPOs are still down 46 percent year to date from 2015.