This week's issue of Front Month is live - I take a look at 2020's rise of the options market and the impact to both stocks and exchanges:https://frontmonth.substack.com/p/options-are-eating-the-world …
Show this thread
-
Exchanges and the analysts who cover them are expecting a new normal in options trading. Below comments from Nasdaq CEO Adena Friedman show an outlook involving higher retail participation in the options market:pic.twitter.com/A8l11hyDmm
Show this thread
paper on the history of bucket shops and their influence on giving the common man access to the stock market in the 1800s.
Has a lot of parallels to today's retail trading craze:
The bottom line - institutions and exchanges are preparing for a bigger options market than we've ever seen. Options are a less competitive business & result in higher volatility for the underlying equity. We're not going back to the old way soon.
-
-
If you find this work interesting, please consider subscribing to get the biggest exchange stories in your inbox every Friday:https://frontmonth.substack.com/
Show this threadThanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
here's some interesting stuff from
@phil_mackintosh suggesting that this trend is driven by retail substituting options for high-priced names: https://www.nasdaq.com/articles/what-options-tell-us-about-stock-splits-2020-11-05 …pic.twitter.com/9yIuF3GO9o
-
seems to be a dangerous trend. compared to eq, options have much higher relative spreads, you pay for something you don't want (vol), expiries need to be rolled, and you don't have voting rights. (though this is true with lots of multi-stock class concoctions.
- Show replies
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.