CHICAGO (HedgeWorld.com)– The options markets once again proved that records were indeed made to be broken, according to data collected by the Options Industry Council, an association funded by the options exchanges and the Options Clearing Corp.
November marks the sixth straight month that equity options volume has increased over the previous year’s volume, according to the group. The OIC tracked a 1.19% increase in equity options volume last month from that of November 2001.
Equity open interest, which is the total number of options contracts not yet exercised or allowed to expire, reached a new daily record on Nov. 15 of 102.4 million contracts. This surpasses the previous record set on Oct. 18 of 101.9 million contracts. Month-end equity open interest also set a new record (Previous HedgeWorld Story).
At the exchange level, the largest exchange, the Chicago Board Options Exchange, announced that its index options volume increased 34% over the volume reported in November 2001. For the exchange, it is the seventh consecutive month that index options volume at CBOE has registered a gain over the previous year. CBOE Traders handle options on a number of stock indexes, including the S&P 500 stock index, S&P 100, Nasdaq 100 and the Dow Jones Industrial Average.
Exchange-wide volume for November totaled 21.6 million contracts and the average daily volume was 1.1 million. At the end of November, open interest reached 99.3 million contracts, which is up 16% from the close of November 2001. Open interest in stock options at 84.2 million contracts for the month was up 13% from the volume logged in for the same time period last year.
“Six months of continuous equity options volume growth indicates that the options market is strong and adaptable during these challenging market conditions,” Paul Stevens, president of the OIC, said in a statement. “The persistent expansion in equity open interest is evidence that investors are using options as a longer-term investment tool.”
Still the monthly records combined have yet to break last year’s record trading. Although volumes have surged, year-to-date equity options volume is at 661.0 million contracts, which is less than the 671.4 million contracts during the same time period in 2001.