E*TRADE Study Reveals Active Options Trading Among Millennials

Digital prowess—coupled with a desire for leverage and income—may correlate with elevated options trading among Millennials

NEW YORK--()--E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results from the most recent wave of StreetWise, E*TRADE’s quarterly tracking study of experienced investors. Results show options trading patterns vary by age:

  • Two out of five (40 percent) Millennials surveyed trade options at least monthly, compared with 25 percent of Gen Xers, and 14 percent of Boomers.
  • Investors as a whole are most likely to use options as a way to generate income, with 36 percent of the survey population, followed by creating leverage (27 percent), hedging against losses (25 percent), and stock speculation (12 percent).
  • Millennials, however, are the age group most likely to use options to create leverage, with 35 percent of the survey population, while Boomers are more likely than other generations to use options to hedge against losses, at 31 percent of the population.

“Millennials are digital natives,” said Steve Claussen, VP of Trader Strategy at E*TRADE Financial. “And within this context it’s understandable why this group may also be the most active options traders, as today there are a great many digital tools that make options trading easier to understand than ever before.”

Mr. Claussen observed the following additional insights about options trading among various generations:

  • Income helps in a low interest rate environment. Amid today’s low rates, surveyed investors may be gravitating towards options writing as an additional way to generate returns on assets within their portfolio.
  • For Millennials, more leverage means greater firepower. Millennials starting out in the investing world may be more likely to have less investable capital compared to older generations. Options may provide leverage for investors looking to gain diversified exposure to asset classes, without needing the capital to buy the underlying security outright.
  • For Boomers, hedging against losses is part of prudent planning. With many Boomers in or near retirement, adding protection against downturns in their nest egg can be a part of a sustainable retirement plan.

E*TRADE aims to enhance the financial independence of traders and investors through a powerful digital offering and professional guidance. To learn more about E*TRADE’s trading and investing platforms and tools, visit etrade.com.

For useful trading and investing insights from E*TRADE, follow the company on Twitter, @ETRADE.

About the Survey

This wave of the survey was conducted from April 1 to April 10 of 2017 among an online U.S. sample of 958 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.18 percent at the 95 percent confidence level. It was fielded and administered by Research Now. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month). The panel is 60 percent male and 40 percent female with an even distribution across online brokerages, geographic regions, and age bands.

 

Referenced Data

 
How often do you place an options trade?
  AGE
 

TOTAL
Q2’17

25–34   35–54   55+
Top two boxes (Weekly and monthly) 26% 40% 25% 14%
Weekly 9% 12% 9% 5%
Monthly 17% 28% 16% 9%
Semiannually 16% 19% 21% 8%
Annually 5% 6% 4% 3%
Less than once a year 14% 12% 12% 18%
Never 39% 23% 38% 57%
Bottom two boxes (Less than once a year and never)   53%   35%   52%   75%
                 
Regardless of your experience with them, which of the following ways would you find options the most useful?
AGE

TOTAL
Q2’17

25–34 35–54 55+
Generate income 36% 34% 38% 37%
Create leverage 27% 35% 30% 14%
Hedge against losses 25% 23% 21% 31%
Speculate stocks   12%   8%   11%   18%
 

“Millennials” defined as age 25–34 // “Gen X” defined as age 35–54 // “Baby Boomers” defined as age 55+

About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services including online brokerage and banking products and services to retail customers. Securities products and services, including options, are offered by E*TRADE Securities LLC (Member FINRA/SIPC) and OptionsHouse (Member FINRA/SIPC/NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.

Important Note: Options transactions are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. For more information, please read the Characteristics and Risks of Standardized Options brochure before you begin trading.

E*TRADE Financial, E*TRADE, the E*TRADE logo, and OptionsHouse are trademarks or registered trademarks of E*TRADE Financial Corporation. ETFC-G

© 2017 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and Research Now are separate companies that are not affiliated. E*TRADE Financial Corporation engages Research Now to program, field, and tabulate the study.

About Research Now

Research Now Group, Inc. is a global leader in digital research data for better insights and business decisions. The company provides world-class research data solutions that enable better decisions and better results for its 3,000 market research, consulting, media, and corporate clients through access to over 11 million deeply-profiled business professionals and consumers in more than 40 countries. Research Now operates globally with locations in the Americas, Europe, the Middle East, and Asia-Pacific, and is recognized as the quality, scale, and customer satisfaction leader in the market research industry. For more information, please go to www.researchnow.com.

Contacts

E*TRADE Media Relations
646-521-4418
mediainq@etrade.com
or
E*TRADE Investor Relations
646-521-4406
IR@etrade.com

Contacts

E*TRADE Media Relations
646-521-4418
mediainq@etrade.com
or
E*TRADE Investor Relations
646-521-4406
IR@etrade.com