ETF Options Break New Records

  • David Campbell

ETF Options Break New Records

The Wall Street Journal reporting record option volume traded yesterday at 68MM contracts continuing a steady climb in activity for this asset class over the past few years.

As an explanation, highlighting this option volume article written by Stefanos Bazinas at NYSE data insights department last summer. Specifically, the impact of options trading as a strategy around central ETF holdings and the ever expanding retail participation in ETF (and general options trading which clearly has come under scrutiny but not abating current volumes) are the central themes to the behaviour. No doubt institutional portfolio management strategies are a big impact to the activity as well given the growth in overall liquidity available.

Also interesting to note in the article is the options traders had it right again last summer with a put/call ratio (recorded at the second highest reading to date at the time of writing) in ETF options of 1.75 versus a reading of 1.17 according to CBOE today.

By the way, CBOE reports the equity put/call ratio is sitting at 0.49 (down from 1.83 at time of article written) suggesting a bullish and much higher call volumes versus put volumes being purchased at the moment!

Let's hope the options markets (alongside the ever increasing participation within the wisdom of crowds theory) have it right again as we watch equity and options markets call bluff on the Fed.

#trading #markets #data