Retail Investors Accounted for 24% of US Options Trading in 2013

TABB Research Shows Ease of Access, New Trading Technology and Rising Sophistication Driving 2014 Listed-Options Growth; Brokers See Strong Revenue Gains, Growing Demand from Investors Embracing Options-Trading Strategies

NEW YORK & LONDON--()--US retail investors are accelerating their use of listed options as part of strategies to manage risk, in stock replacement strategies and as part of more complex strategies that have traditionally been the sole domain of sophisticated institutional investors.

According to TABB Group in new research issued today, “US Retail Options Trading: It Doesn’t Get Any Better Than This,” retail investors are using increasingly more sophisticated strategies enabled through cutting-edge technology provided by retail brokers to access the US-listed options market.

“Retail investors have always maintained an integral role in the US options market but in recent years they’ve ramped up their trading activity,” says Andy Nybo, TABB’s head of derivatives research and author of the report. “Brokers tell us they’re seeing strong revenue gains and growing demand from retail investors who are seeking to become more intimately involved with options trading strategies. At TABB, we expect to see strong growth in 2014 from retail investors as greater adoption and growing complexity of strategies as well as secular shifts into equity assets by retail accounts drive higher volumes, to an average 4.1 million contracts daily, an increase of 5% from 2013.”

Retail brokers are investing significant resources to build out and revamp trading front-ends to support demands from options trading clients. Brokers are also providing comprehensive analytical capabilities that rival and frequently surpass functionality imbedded in platforms on institutional trading desks, Nybo says. “Retail investors are seeing falling commissions and better prices, as competition for the retail investor’s business is allowing brokers to maximize the value of the order flow, he added.

The 13-page report with 6 exhibits is based on interviews with the largest retail brokers and consolidators in the US options market, now available for download by TABB Group Research Alliance Derivatives clients and pre-qualified media at http://www.tabbgroup.com/Login.aspx. For a copy of the Executive Summary or more information, visit www.tabbgroup.com. To purchase the report, write to info@tabbgroup.com.

About TABB Group

With offices in New York and London, TABB is the only research and consulting firm focused exclusively on capital markets, based on the interview-based, “first-person knowledge’ research methodology developed by Larry Tabb. For more information, visit www.tabbgroup.com. In 2010, TABB launched TabbFORUM, the online capital markets community for peer-to-peer opinion and analysis covering current industry issues, tracked daily by more than 18,000 professionals.

Contacts

For TABB Group
martinrabkinink
Martin Rabkin, 914-420-5739
mrabkin@martinrabkinink.com

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Retail Investors Accounted for 24% of US Options Trading in 2013; TABB Research Shows Ease of Access, New Trading Technology and Rising Sophistication Driving 2014 Listed-Options Growth

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Contacts

For TABB Group
martinrabkinink
Martin Rabkin, 914-420-5739
mrabkin@martinrabkinink.com