US listed options soared to the highest monthly volume in 10 months amid the UK’s referendum and decision to leave the European Union, according to TABB research.
Volumes in the second quarter this year were up 4.6% compared to the second quarter last year, boosted by activity in June where contracts totalled over 1 billion.
The statistics come from a report authored by TABB Group analyst Callie Bost, who said: “The surge in June’s options volume was propped up by a rush into broad-market index products.”
Index and exchange traded funds (ETFs) options covered 57% of the total volume in June, which TABB said is the highest concentration for the two groups since 2012.
The report explained: “As geopolitical events and monetary policy developments continue to rattle markets, traders are increasingly gravitating toward options on indices and ETFs for portfolio protection.”
VIX options also soared in June, with contracts reaching almost 16 million, up 21% compared to June last year.
It concluded that the volatility in June, “prompted market makers to pull back their risk exposure, with the average bid/ask spread widening to 38 cents, the widest since June 2015.”