Option Volumes Dive in September - Down 7%

The Options Industry Council (OIC) announced that 17,348,823 contracts were traded on average each day in September, a 6.9 percent decline from the 18,630,087 contract average in September 2011, and the highest average recorded since February.

Total options trading for the month was 329,627,631 contracts, down 15.7 percent from the September 2011 volume of 391,246,939 contracts. September 2011 had two more trading days than September 2012.

Trading volume so far for 2012 stood at 3,031,485,451 contracts, which is 13.6 percent lower than the 3,507,063,494 contracts traded throughout the same period last year. This marks the fifth consecutive year that annual options trading volume has surpassed 3 billion contracts, and the second consecutive year it has done so by the end of September.

Equity options volume (options on individual stocks and ETFs) for September came in at 301,402,163 contracts, down 16.2 percent compared to September 2011 when 359,818,479 contracts were traded. On average, 15,863,272 equity options contracts changed hands each day in September, which is 7.4 percent less than the daily average of 17,134,213 contracts from September 2011. Equity options traded so far this year stood at 2,794,080,742 contracts, down 14 percent compared to the 3,248,324,766 contracts traded in the same period last year.

FX Options are thought to be useful for traders looking to trade in sideways markets, Forex Magnates team wrote a detailed report on FX Options in the Q1 quarterly report.