somewhere in there u have the advent of ETFs making an impact
Pretty wild chart showing US options volumes back to their inception in 1973. First S-curve moment was electronic trading in early 2000s, second (and bigger) S-curve moment is retail trading boom:pic.twitter.com/i3YzlVsd45
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I was on the CBOE floor when the first ETF options, SPY, were listed. Was probably 2004 or 2005. Helped increase number of contracts since had to trade 10x number of contracts for same notional.
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Tail wagging the dog.
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Around 2000, you had the first electronic exchange, ISE, and cross exchange listing. In 2005 you had remote market making start on CBOE. Then financial crisis accelerated things. Then steady until meme stocks and Covid.
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Wasn’t CBOE the one to say screw it let’s just trade each others options? And then volumes erupted
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Also, don’t forget mentioning that after every single taxpayer huge bailout, the “pro” bros when on a shopping spree to@leverage their new bonus back into betting in derivatives.
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Compare it to US M2 cap
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The history of the options market is awesome. It's a history of useful financial innovation and a clear example of the principle that making things easier and safer to trade generates exponential volume increases. I think the volume CAGR is now around 10% for nearly 50 years?
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what's the source of the data?
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