Record Setting Month for CBOE ETF Options

A new monthly record being set in trading of options on exchange-traded funds seems to occur more often than not these days at the Chicago Board Options Exchange. Nonetheless, it is notable that in September the CBOE experienced it most active month ever.

During September, ETF option volume reached 39.9 million contracts, or a daily average of 1.9 million contracts. That surpassed the previous record set in July, of 34.4 million contracts.

Two individual ETF options were a big part of the record-setting month, SPDRs (SPY) and iShares MSCI Emerging Markets Index (EEM). Options on these ETFs set records in their respective trading volumes also. Overall, ETF options volume was 159% higher than the year-ago level.

Cash index options volume mirrored the situation in ETF trading on CBOE. A record level of 29.2 million contracts, or a daily average of 1.4 million contracts was reached in September, besting the previous record set in August 2007, of 27.7 million contracts.

In all, 127.2 million contracts changed hands on the CBOE in September, with an average daily volume of 6.1 million contracts. That volume bested the previous monthly record set in July 2008, when 126.2 million contracts were traded.

Year over year, the trading volume was 89% greater than last September.

Comments

[aCBOEtrader:]

Just for the record, EEM is a product that the market makers do not PAY for order flow. So apparently paying every firm $.65 per contract doesnt increase volume. All other products on the CBOE are $.65 per contract . As a market maker, I pay monthly around $10,000 dollars to firms so they will continue to send orders to the CBOE. Every market maker on every exchange does this. Sounds like extortion, right. Please write an article about that.

2008 Oct 02 11:47 AM

[lytle:]

aCBOEtrader: Thanks for your comment! I wish more market makers and floor traders would comment on the "goings-on" and their opinions. To my way of thinking; who knows more about it?

2008 Oct 04 09:01 AM

[lytle:]

Hey! I'm with aCBOEtrader: "Sounds like extortion, right. Please write an article about that."

2008 Oct 04 09:06 AM