The Global OTC Derivatives Market in 2026: Size, Composition, Types, Trends and Vulnerabilities

AbstractThe global over-the-counter (OTC) derivatives market reached approximately USD 845 trillion in notional amounts outstanding by the second half of 2025, marking one of the strongest expansions recorded in more than a decade. Interest rate derivatives accounted for roughly 79 percent of total notional outstanding, followed by foreign-exchange contracts. Gross market value rose to approximately USD 22.8 trillion. Using data from the Bank for International Settlements (BIS) semi-annual statistics and the 2025 Triennial Central Bank Survey, this article examines the size, composition and structural features of the market as of 2026. It systematically reviews the four principal categories of OTC derivatives, provides a detailed analysis of interest rate swaps as the market’s core instrument, and clarifies the fundamental differences between forward contracts and exchange-traded futures. The paper further analyses key trends, including the completed transition to risk-free reference rates, the continued expansion of central clearing, and persistent dealer concentration, before identifying emerging vulnerabilities related to liquidity in non-centrally cleared segments, intermediation capacity, cross-border regulatory fragmentation and residual leverage. The findings indicate that while post-crisis reforms have materially strengthened market resilience, important sources of fragility remain and warrant sustained supervisory attention.