Nasdaq-listed companies fuel investor demand for options trading
New York, January 6, 2021 — Nasdaq (Nasdaq: NDAQ) announced today that 2020 was the first year it led all exchanges in total volume traded for equity options across all categories, including proprietary single-exchange-listed options products. It was also the 11th consecutive year Nasdaq led all exchanges in trading of multiple-listed equity options contracts.
In 2020, Nasdaq’s options markets processed 365 million trades and 2.58 billion contracts. These record numbers, combined with handling more than 8.88 trillion messages, made 2020 the most active year of options trading since options were introduced as tradeable products in 1973, and marked a 52% volume increase over 2019.
“The modern day industrials in the Nasdaq-100 continued to drive the global economy during a uniquely challenging year, and options gave investors another way to express their interest in these great companies,” said Greg Ferrari, Vice President and Head of Nasdaq Options. “The increase in options trading demonstrated to all market participants how Nasdaq technology enhances the price discovery and risk transfer process to meet their investment objectives.”
According to Nasdaq research, elevated volatility and uncertainty surrounding the U.S. election and COVID-19 fueled record levels of retail participation in the U.S. markets last year. Retail options strategies such as stock replacement, yield enhancement, and portfolio protection were widely used during market fluctuations.
This expansion was led by a sharp increase in shorter-term options contracts, a market-wide focus on retail expansion and customer education, along with the stock splits of Apple (Nasdaq: AAPL) and Tesla (Nasdaq: TSLA), two components of Nasdaq-100 (NDX), Nasdaq’s flagship index that gained in value by more than 40% last year.
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