Henry Schwartz, President of Trade Alert led a panel discussion on Sourcing Liquidity in Index Options today at RMC in Europe.  The panelists were:

  • Kristin Boyd, Director, Credit Suisse
  • William Ellington, Managing Partner, X-Change Financial Access LLC
  • Stacey Gilbert, Head of Derivatives Strategy, Susquehanna
  • Sander van Zelm, Head of Institutional Trading, Optiver

Henry started things off giving an overview of the US options industry.  He noted that indexes (specifically VIX and SPX) continue to experience strong growth along with options on ETPs.  Option volume of individual stocks continues to lag industry growth.  Weeklys are now 30 to 40 percent of daily volume.  This volume is taking away from longer term options a bit, but some of the volume in short dated options is new volume and not taking away from longer dated markets. 

During the panel there was discussion around FLEX options which CBOE offers on indexes, ETPs, and stocks.  FLEX is an acronym that stands for FLexible Exchange® Options.  FLEX volume is up 40% year over year and growth for this market is actually coming from individual stocks and indexes.  Slightly different from volume growth trends being seen in the traditional listed market. 

Finally, it was noted that 70% of SPX and VIX volume is being executed as complex (spread) orders, which has been increasing over time.