Nasdaq OMX has seen an uplift in volume and market share for US equity options, while similar figures for equities have declined, Q2 volume data has shown.
The exchange operator’s June figures show a 20% year-on-year jump for US equity options to 89 million contracts traded, compared to 74 million in June 2012.
Nasdaq OMX’s quarterly figures similarly show an increase in market share for the instruments, which grew to 28% market share on 284 million contracts traded in Q2 2013, from 25.2% and 237 million contracts in Q2 2012.
For equities, both volume and market share have slipped for Nasdaq OMX. June volumes from the market operator show a 14.3% decline year-on-year to just over 27 billion shares traded, from 31.3 billion in June 2012.
Nasdaq operates the largest US equity options exchange by market share, the Nasdaq OMX PHLX exchange, which trades around 21% of all US equity options. In December, the exchange operator also launched a new equity options trading venue, Nasdaq OMX BX Options.
Nasdaq’s quarterly data reflects an increase in equity options trading for the firm’s markets, but also a wider trend in US trading strategies, which have tended towards equity options in recent years.
Speaking to The TRADE Derivatives for this year’s Q1 issue, Slade Winchester, head of US derivatives electronic execution sales and strategy at Citi, said the growth of the US equity options reflected the growing maturity of the market. In times of market stress, Winchester argued, equity options have held up better than other asset classes.
“In 2008, when the CBOE Volatility Index (VIX) ran up to 75, the options markets remained consistent and didn’t experience a liquidity gap like other markets,” he said.
Along the current growth curve, Citi officials have estimated the number of US equity options exchanges could grow from 11 to 16 by 2018.
“We do not see this trend of new options exchanges stopping,” Winchester said. “There’s no real reason why the industry will not see more of them.”