April brought a sizable upswing in equity index futures trading at CME Group Inc. (CME), as the rally in stocks and lower volatility brought traders back to the market and new participants arrived on the scene.

Average daily volume in CME's E-mini equity futures complex advanced 17% over April 2008 levels, according to data from the Chicago-based exchange operator, a bright spot as activity in other product groups remains depressed.

Trade in mini-sized electronic contracts on the S&P 500 stock index, the most heavily traded of CME's equity products, was 33% above year-ago levels.

E-mini contracts, geared primarily toward retail participants, are one-fifth the value of standard-sized futures contracts.

Equity derivatives make up about one-fourth of CME Group's revenues and in the first quarter of 2009 topped interest rate futures and energy as the most profitable product group, the exchange reported last week.

Volume in CME's interest rate futures complex, which has historically accounted for 60% of growth, continued at about half year-ago levels in April.

The rally that ignited stocks in mid-March has lured investors back to equity markets, with April average daily volume at cash equities operators NYSE Euronext (NYX) and Nasdaq OMX (NDAQ) up a respective 30.9% and 21% year-on-year, according to estimates from Fox-Pitt Kelton.

Meantime U.S. options trading rose 20.7% in April, with the Chicago Board Options Exchange posting a 28% increase.

"There's nothing like a bull move to get people involved, after the liquidation we saw in the fourth quarter," said Frank Lesh, a futures broker with Futurepath Trading. "There's a propensity for people to trade right now, and generate a little income."

Stocks' recent run-up, with the Dow Jones Industrial Average almost 25% higher since March 9, prompted trend-following futures traders to reverse a long Treasurys-short equities trade that saw much use throughout the financial crisis, according to market observers.

Lower volatility brought back some investors who began the year on the sidelines, and CME has also seen newcomers as traders from dealer banks and hedge funds find new homes or start up their own shops, according to Scot Warren, CME's managing director of equity products.

While the overall number of participants trading equity derivatives is about the same, Warren said traders' fragmentation brings competing views that add depth to the market.

Warren said CME's array of equity index futures, covering the S&P 500, the Dow Jones Industrial Average and others, has been an advantage as more investors play one benchmark against another, sometimes to express a view on a particular sector.

If this type of customer interest holds, CME may eventually develop sector-specific products, Warren said.

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com;

and Howard Packowitz, Dow Jones Newswires; 312-750-4132; howard.packowitz@dowjones.com