The options market is on a tear – with volume hitting a whopping one billion contracts in the third quarter.
The third quarter gains represent a 4.9% increase from the second quarter total and an 8.2% increase from the year-earlier period.
In its latest research, “U.S. Options Market Review: Third Quarter 2014,” Tabb Group also reported that U.S. options volume rebound was driven in part by a 15.8% jump in September’s total as retail fervor around Apple’s new product announcements, the Alibaba IPO and rising volatility brought monthly volume to 365.9 million contracts.
The report, compiled and written by TABB Group principal Andy Nybo, head of derivatives research, also noted that volatility spikes in late July and late September helped push volatility averages up in each month, with the CBOE index averaging 13.5 in both August and September – prompting more trading.
Weeklies trading, Nybo noted, remained strong in the third quarter with volume totaling 270 million contracts, up 7% from the second quarter total and 39% from the year-earlier period.
Bid/offer spreads remained stable during the third quarter, with the average spread for all options at 35 cents in the quarter, up marginally from the 34-cent average in first quarter.
The entire report, complete with charts and exhibits is available from Tabb here.
