From a quiet revolution to a record-shattering boom, the options market exploded in 2023 as billions in contracts changed hands, signaling a dramatic shift in how investors are approaching the markets.
Key Takeaways
- In 2023, The Options Clearing Corporation (OCC) cleared a record 11.95 billion options contracts, marking a 10.9% increase from 2022
- U.S. options average daily volume (ADV) reached 48.5 million contracts in 2023, up 12% year-over-year
- SPX options alone accounted for 1.36 billion contracts in 2023, representing 25% of total U.S. volume
- In 2023, total U.S. options open interest exceeded 45 million contracts at year-end, up 8% from 2022
- SPX options open interest reached 3.2 million contracts in Dec 2023
- Equity options open interest averaged 32 million contracts daily in 2023
- Overall U.S. options market grew at CAGR 15.2% from 2018-2023
- Options notional value traded exceeded $1.5 quadrillion in 2023, up 18%
- Number of underlyings with options trading rose 12% to 2,500 in 2023
- In 2023, SPX options represented 28% of total U.S. options volume, highest ever
- Equity options comprised 55% of total volume in 2023
- Index options volume totaled 3.8 billion contracts in 2023
- Average VIX level in 2023 was 17.5, down from 2022's 21.2
- VIX hit intraday high of 36.45 on Oct 27, 2023 amid Middle East tensions
- VVIX (VIX of VIX) averaged 95 in 2023, peaking at 150
Options trading hit record highs in 2023, driven by surging retail activity and new products.
Market Growth
1Overall U.S. options market grew at CAGR 15.2% from 2018-2023
Verified2Options notional value traded exceeded $1.5 quadrillion in 2023, up 18%
Verified3Number of underlyings with options trading rose 12% to 2,500 in 2023
Verified40DTE options market share grew from 5% to 43% of SPX volume 2022-2023
Directional5International options volume up 25% globally in 2023 per FIA
Single source6U.S. options market cap exposure $50 trillion end-2023
Verified7Adoption of multi-leg strategies up 30% in retail trading 2023
Verified8Options trading apps downloads surged 40% YoY in 2023
Verified9Retail participation in options reached 25% of volume in 2023
Directional10AUM in options-linked ETFs grew 22% to $200 billion 2023
Single source11Volatility products market expanded 35% in trading value 2023
Verified12Crypto options market cap grew 150% to $10 billion 2023
Verified13Number of clearing members for options up 10% to 120 in 2023
Verified14Average trade size in options declined 5% to 1.2 contracts due to retail
Directional15Global derivatives market options share 40% of total volume 2023
Single source16U.S. equity options growth 16% vs futures 8% in 2023
Verified17End-user options trading volume up 28% in 2023 per FIA
Verified18Options premium turnover $400 billion monthly avg 2023
Verified19SPX options market grew 20% in notional terms 2023
Directional20Equity options notional outstanding $25 trillion end-2023
Single sourceMarket Growth Interpretation
Despite the eye-popping $1.5 quadrillion in notional trades, the explosion of 0DTE gambling, and apps making options as easy as ordering takeout, the market's breathtaking 15% annual growth is underpinned by a more sobering expansion into every conceivable asset class and strategy, proving that Wall Street's favorite casino is now a dangerously mainstream global institution.
Open Interest
1In 2023, total U.S. options open interest exceeded 45 million contracts at year-end, up 8% from 2022
Verified2SPX options open interest reached 3.2 million contracts in Dec 2023
Verified3Equity options open interest averaged 32 million contracts daily in 2023
Verified4VIX futures and options open interest hit 1.5 million in Q4 2023
Directional5ETF options open interest grew to 8.7 million contracts by end-2023
Single source6Russell 2000 index options OI peaked at 450,000 contracts in 2023
Verified7Total industry open interest 42.1 million contracts end-Q3 2023
Verified8Nano options open interest reached 200,000 contracts within months of launch
Verified9SPY ETF open interest averaged 2.5 million contracts in 2023
Directional10Non-index equity OI 25 million contracts end-2023
Single source11QQQ open interest 1.8 million contracts peak 2023
Verified120DTE options contributed to 15% rise in daily OI turnover 2023
Verified13IWM open interest 900,000 contracts average 2023
Verified14Total options OI across Cboe exchanges 25 million end-2023
Directional15FX options open interest $150 billion notional globally H1 2023
Single source16E-mini Nasdaq-100 options OI 600,000 contracts 2023 avg
Verified17ARKK options OI 150,000 contracts peak volatility periods 2023
Verified18Weekly options OI stable at 5 million contracts monthly avg 2023
Verified19Bitcoin options OI on CME $2 billion notional end-2023
DirectionalOpen Interest Interpretation
It seems America has traded baseball cards for options contracts, turning market hedging into the nation's new, caffeinated pastime.
Product Specific
1In 2023, SPX options represented 28% of total U.S. options volume, highest ever
Verified2Equity options comprised 55% of total volume in 2023
Verified3Index options volume totaled 3.8 billion contracts in 2023
Verified4ETF options made up 20% of volume, 1.9 billion contracts 2023
Directional5VIX options volume 402 million, 4% of total U.S. market 2023
Single source6Russell 2000 (RUT) options 350 million contracts traded 2023
Verified7NDX options volume 250 million contracts in 2023
Verified8Single stock options volume dominated by top 50 underlyings at 70% share
Verified9SPY options 1.2 billion contracts, largest ETF product 2023
Directional10QQQ options 900 million contracts traded 2023
Single source11IWM options 500 million contracts, key small-cap product
Verified120DTE products across SPX/RUT/NDX totaled 3 billion contracts 2023
Verified13Nano SPX options volume 50 million in first year
Verified14FX options on CME averaged $100 billion daily notional 2023
Directional15Bitcoin options on Deribit 60% market share crypto options 2023
Single source16Weekly SPX options volume 800 million contracts 2023
Verified17ARCA options volume on NYSE 1.5 billion contracts 2023
Verified18PHLX gold options (OEX) niche volume 20 million 2023
Verified19ETP options excluding ETF 5% share of equity volume 2023
Directional20XSP mini-SPX options 150 million contracts 2023
Single source21Total VIX product suite volume 500 million contracts 2023
VerifiedProduct Specific Interpretation
The market spent 2023 screaming into the SPX megaphone while dabbling in everything from nano bets to gold whispers, proving that while traders love to diversify their drama, they really just want to supercharge their views on the S&P 500.
Trading Volume
1In 2023, The Options Clearing Corporation (OCC) cleared a record 11.95 billion options contracts, marking a 10.9% increase from 2022
Verified2U.S. options average daily volume (ADV) reached 48.5 million contracts in 2023, up 12% year-over-year
Verified3SPX options alone accounted for 1.36 billion contracts in 2023, representing 25% of total U.S. volume
Verified4Equity options volume hit 5.9 billion contracts in 2023 via OCC, a 15% rise from prior year
Directional5December 2023 saw U.S. options ADV of 51.2 million contracts, highest monthly ever
Single source6VIX options volume reached 402 million contracts in 2023, up 20%
Verified7Russell 2000 (RUT) options ADV averaged 1.2 million contracts in Q4 2023
Verified8ETF options volume surged to 1.8 billion contracts in 2023, 25% growth
Verified9January 2024 options ADV hit 52.3 million, new record
Directional10Nano equity options launched with 10 million contracts traded in first month
Single source11Total U.S. listed options volume in 2022 was 10.8 billion contracts
Verified12Q3 2023 options volume totaled 3.2 billion contracts, up 15%
Verified13SPY ETF options ADV 2.1 million contracts daily in 2023 average
Verified14Non-index equity options volume 4.5 billion in 2023
Directional15February 2024 ADV 49.8 million contracts amid volatility
Single source16IWM options volume 450 million contracts in 2023
Verified17QQQ options ADV 1.5 million in H2 2023
Verified18Total industry options volume Oct 2023: 2.1 billion contracts
Verified190DTE SPX options traded 2.5 billion contracts in 2023, 40% of SPX volume
Directional20OCC cleared 1.2 billion contracts in Q1 2023 alone
Single source21ADV for U.S. options in Nov 2023: 47.6 million
Verified22FX options volume globally $6.5 trillion notional in H1 2023
Verified23E-mini S&P 500 options ADV 1.8 million in 2023
Verified24Total options ADV across exchanges 45.2 million in 2023 avg
Directional25ARKK options volume peaked at 500k contracts daily in 2023
Single source26Weekly options volume grew 30% to 1.1 billion in 2023
Verified27March 2024 options volume 2.8 billion contracts monthly
Verified28Bitcoin options volume on Deribit $1.2 trillion notional 2023
Verified29Total equity options put/call ratio volume 1.2:1 in 2023
Directional30April 2023 peak day volume 65.4 million contracts
Single sourceTrading Volume Interpretation
It seems everyone decided 2023 was the year to trade their crystal ball for an options chain, with record volumes revealing a market both hedging its bets and chasing its tail with unprecedented fervor.
Volatility Metrics
1Average VIX level in 2023 was 17.5, down from 2022's 21.2
Verified2VIX hit intraday high of 36.45 on Oct 27, 2023 amid Middle East tensions
Verified3VVIX (VIX of VIX) averaged 95 in 2023, peaking at 150
Verified4Realized volatility of S&P 500 averaged 15% annualized in 2023
Directional5Implied volatility skew for SPX options steepened 5% in Q4 2023
Single source630-day ATM SPX IV averaged 18.2% in 2023
Verified7VIX futures contango averaged 2% monthly in low vol 2023 periods
Verified8Options gamma exposure peaked at $500 billion for SPX dealers Q3 2023
Verified9Volatility of volatility (VVIX) correlation to VIX 0.85 in 2023
Directional10Tail risk premia in OTM puts averaged 2.5% yield 2023
Single source11SPX 90-day IV term structure flattened to 1% slope end-2023
Verified12Retail gamma squeeze events caused 3% VIX spikes 5 times in 2023
Verified13Historical vol exceeded IV 20% of trading days in 2023
Verified14VIX ETF AUM $8 billion average 2023
Directional15Dispersion trading vol premia averaged 4% annualized 2023
Single source16Crypto implied vol for BTC options averaged 65% in 2023
Verified17Equity single-name IV premium over index 10% average 2023
Verified18VIX term structure backwardation days totaled 45 in 2023
Verified19Put skew index for SPX rose to 120 in Oct 2023
Directional20Realized vol dispersion across S&P 500 12% avg 2023
Single sourceVolatility Metrics Interpretation
While traders enjoyed a calmer average market in 2023, the ghosts of volatility never left the party, leaving option desks to nervously navigate a landscape where sudden geopolitical shocks, retail-fueled gamma squeezes, and an acutely anxious volatility-of-volatility index all hinted that the market's quiet confidence was just a thin veneer over a still-jumpy soul.
Sources & References
- Reference 1THEOCCtheocc.comVisit source
- Reference 2CBOEcboe.comVisit source
- Reference 3FINANCEfinance.yahoo.comVisit source
- Reference 4ISHARESishares.comVisit source
- Reference 5INVESCOinvesco.comVisit source
- Reference 6BISbis.orgVisit source
- Reference 7CMEGROUPcmegroup.comVisit source
- Reference 8NYSEnyse.comVisit source
- Reference 9ARK-FUNDSark-funds.comVisit source
- Reference 10INSIGHTSinsights.deribit.comVisit source
- Reference 11NASDAQnasdaq.comVisit source
- Reference 12FIAfia.orgVisit source
- Reference 13TASTYTRADEtastytrade.comVisit source
- Reference 14SENSORTOWERsensortower.comVisit source
- Reference 15SECsec.govVisit source
- Reference 16ETFDBetfdb.comVisit source
- Reference 17COINMARKETCAPcoinmarketcap.comVisit source
- Reference 18DERIBITderibit.comVisit source
- Reference 19BARCHARTbarchart.comVisit source
- Reference 20SPOTGAMMAspotgamma.comVisit source
- Reference 21TASTYLIVEtastylive.comVisit source
- Reference 22IVOLATILITYivolatility.comVisit source
- Reference 23SKEWskew.comVisit source
- Reference 24VIXCENTRALvixcentral.comVisit source