With a record 3.6bn equity options contracts traded last year and some nine exchanges serving the market by the end of the year, is there room for more growth? Elise Coroneos reports.
Since the first standardised equity option rolled off the
conveyor belt in the US in 1973, the growth of the industry can
safely be described as impressive by almost any standards. Each
year, with only 2002 as an exception, the US equity options
market has seen growth in the number of contracts it
Going from strength to strength, it has reached one
milestone after another, particularly over the last 10 years.
No sooner had the US Options Clearing Corporation reported in
2004 that it had cleared a record 1bn contracts that year, than
it went on to clear 2bn contracts in 2006.
And in 2009, despite analysts’ predictions that
the global financial crisis would create a decline of 15% to
20% in contracts traded, instead the industry recorded another
increase, if modest at 0.84%, to clear 3.62bn contracts.
But as the economies of the world recover from the global
financial crisis, the question remains: Is there still room for
growth in the US equity options market? Given the shake up of
world financial markets, what will be the new
'normal’ in the growth volumes the industry can
expect in the future?
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