Between the 1970's and the 1980's, the derivatives market flourished. Forwards, futures and options began to be regularly traded. According to information gathered by The Bank of International Settlements, at the end of April 2001 the value of over the counter(OTC) positions outstanding was over US$99 trillion, while the value of positions outstanding in organized exchanges was approximately US$20 trillion. In Latin America the largest derivatives exchanges are located in Argentina (MATBA, ROFEX), Brazil (BM&F, BOVESPA), and Mexico (MexDer). In addition, OTC markets exist in Chile and Peru. Excluding Peru, Chile's derivatives market is to date the least developed. Most domestic transactions are OTC, and consist of currency forwards (US dollar-Chilean peso). The use of other derivatives, such as options on stocks and futures on stock indices, has not gained ground. Economists claim that the blame should be put on regulatory constrains faced by institutional investors, and on market illiquidity. However, recent amendments to the Law of Capital Markets might boost the derivatives market by providing additional investment opportunities. Meanwhile, the market of currency forwards continues to be the most active. In particular, the elimination of the floating band of the US dollar against the Chilean peso in September 1999 increased currency risk, and made investors turned to shorter- maturity contracts.
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