US Listed Options Trading Volumes down for Third Month in November

The total trading volume of listed options in the US came in at 323.3 million contracts during November, down 11 percent from the previous month, TABB Group said in its latest Options LiquidityMatrix. On an annual basis, however, volumes were up 9.7 percent.

This is the third consecutive month of volume declines, said the author of the report, derivatives research analyst Callie Bost, adding that November volumes were particularly low due to the Thanksgiving holiday.

Lower Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term Presses Volumes

The other leading factor determining the lower November volumes were calmer markets, after three months of heightened volatility, the TABB Group report noted. In the eleven months from January, average monthly volumes were 2.7 percent lower than the respective figures for 2014.

One piece of good news for the options market during this quiet month, however, was the launch of BATS’s EDGX platform, which took place on November 2. Nonetheless, traded volumes on the platform were only 454,000 contracts, which was just 0.2 percent of the total amount of options traded in the US during the reported period.

TABB Group’s monthly options market report compiles data from all options-trading exchanges in the country. The reports feature analysis and statistics from data provider Hanweck Associates.