Why everyone is now an options trader | The Economist

Why everyone is now an options trader

On average last year almost 30m equity options changed hands each day

IN THE BUCKET shops of early 20th-century America, ordinary punters could bet on the direction of share prices with a tiny down-payment. The punters liked this, because it gave them a lot of notional exposure for a minuscule outlay. The bucket shops on the other side of the wagers loved it, too, because hour-to-hour fluctations in the price meant punters often got wiped out. No stock certificates ever changed hands. This was betting, pure and simple.

This brings us to the rapid growth of the present-day options market. On average last year almost 30m equity options were traded each day on American exchanges, a rise of more than 50% from 2019, according to OCC, the world's largest clearer of such derivatives. In recent weeks, the volume has regularly risen above 40m a day (see chart).

Live News Feed

News Feed featuring the top articles in the finance world from global publications such as Financial Times and the Economist.

Click here to view

Powered by © Neon Accelerator

From the Web

Railroads Strike a $25 Billion Merger | The Wall Street Journal

| From the web

Canadian Pacific agreed to acquire Kansas City Southern in a merger valued at about $25 billion that would create the first freight-rail network linking Mexico, the U.S. and Canada.

Read More >

Warren Buffett Would Say Do This With Your $1,400 Stimulus Check | MoneyWise

| From the web

The billionaire isn't getting a payment, but he has a strong opinion on how to use yours.

Read More >

A Fed With No Fear of Inflation Should Scare Investors | The Wall Street Journal

| From the web

Markets are only just waking up to the implications of an important shift in Federal Reserve policy.

Read More >

As Blackstone Barrels Toward Trillion-Dollar Asset Goal, Growth Is In, Value Out | The Wall Street Journal

| From the web

Jonathan Gray, Blackstone Group’s day-to-day leader, is guiding a shift at an investment powerhouse that made its name buying into undervalued companies.

Read More >
Go to Top