CBOE’s May Options Volumes Record Second Highest Reading in 2017

Futures and options volume both recovered in May with US equity strength helping drive a rebound in volumes.

The Chicago Board Options Exchange Holdings (CBOE, NASDAQ: CBOE), one of the largest operators in the US equity options market, has just reported its trading volumes for the month ending May 2017. The most recent figures saw a rebound in key segments, helped by markets that were quite active in the United States on account of higher volatility.

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In particular, US markets were influenced by several political developments in May, such as the abrupt firing of FBI Director James Comey and other scandals facing the Trump administration. Overall, US equity indices suffered a short-term setback, only to bounce off a monthly low and establish record highs.

CBOE’s latest figures are a slight departure from other global exchanges, which had seen declines in monthly volumes or tight consolidations. Elsewhere in the world, European markets grappled with the French elections, while volatility on the whole ticked up after a relatively tranquil April. During May 2017 however CBOE Holdings reported a total trading volume for options contracts on the Chicago Board Options Exchange, C2 Options Exchange, and futures contracts on CBOE Futures Exchange, of 154.9 million, up 13.4 percent month-over-month from 136.6 million contracts in April 2017.

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This constituted a bounce off a 2017 low, as April represented a bottoming out for CBOE’s overall volumes. The exchange also yielded an average daily volume (ADV) of 7.0 million contracts per day in May 2017, which was lower by a margin of 2.8 percent month-over-month from 7.2 million contracts per day in April 2017. This can best be attributed to a differential in trading days during May, which featured 22 trading days relative to just 19 the month before.

CBOE’s total volumes also grew by an even larger factor of 29.2 percent year-over-year from 119.9 million contracts in May 2016. Its ADV also rose by 23.2 percent year-over-year from just 5.7 million contracts per day in May 2016.

Volumes Rundown

Across its futures business, CBOE’s volume was disclosed at 6.7 million contracts in May 2017, its second consecutive monthly growth, this time by approximately 17.5 percent month-over-month from 5.7 million contracts set back in April 2017, as well as a 39.6 percent boost year-over-year from 4.8 million contracts in May 2016. Futures volume has been trending upwards in recent months, though shifting pockets of volatility has also contributed to what has been an uneven performance in 2017 on the whole.

Looking at CBOE’s US equities volumes, May 2017’s trading volume helped pare last month’s losses, coming in at 28.3 million contracts, or 17.4 percent higher month-over-month from 24.1 million contracts in April 2017. US markets were highly active in May, as indices such as the S&P 500 also registered an all-time high (2,417). When measured against its 2016 equivalent however, the latest numbers were lower, with a 6.7 percent decline year-over-year from 30.3 million contracts in May 2016.

Hotspot’s Volumes Spike in May

CBOE-owned electronic communications network (ECN) Hotspot also reported on its performance last week, marking its third best month of 2017 in May. The company reported that trading volumes reached $647.3 billion last month, a figure that is higher by 17 percent when compared to April and by 26 percent when compared to May 2016. The average daily trading volumes (ADV) for the company rose marginally when compared month-on-month, as the month of May had 3 more trading days compared to April. The ADV was higher by 1.5 percent month-on-month and by 20 percent when compared to a year ago.

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