Is Option Trading Volume in 2023 at an All Time High?

Tom Gentile

Posted in
Options Trading

By: Tom Gentile
February 10th, 2023

2 mins read

A heads-up email via email hit my inbox today.  It was from one of my programmers, the chief architect of the software www.tomsoptiontools.com.

He sent an image and info from CBOE Global Markets, and it showed that options trading volume looks to be at all-time highs, and they reached that here in February

Here are a couple of bullets of the data shown.

  • In a single ay in early February 40+ million options contracts traded / changed hands
    • That was the highest level on record, which almost bested 2022’s daily average volume for combined puts and calls
  • That propelled the overall activity above 68 Million contracts, which is also a record.

Look at the image that accompanied the data for Daily Call Options Volume (Figure 1).

Figure 1 Daily Call Options Volume
Figure 1 Daily Call Options Volume

Reasons for Extreme Options Trading?

There is likely a bunh of reasons for sugh high otpions trading activity thus far in 2023, but here isour take on a possible few.

The markets may be anticipating the Fed executing a soft landing when it comes to a recession as they fight to battle excessively high inflationi.

Along with that comes the markets possibly having already priced in those concerns and the Fed’s anticipated next one or two rate hikes and bulls feel the worst is behind us.

Earnings:  The earnings for companies being reported now – already half-way through the companies in the S&P 500 – haven’t been lightin the world on fire.  The numbers of earnings and revenues are coming in pretty flat.

There might be some that still feel confident loading up on options trades since flat is better than down/poor and to see things holding up at least flat a year after the markets were the most bearish its been in 5-10 years adds to their optimism.

To Wrap

Whether you see things in these lights or not, one can see and or research more data to help you gain conviction for trading options, trading options even more than you already are or maybe you decide to stand down.

You know how you feel about the markets and this insight now give you a view on how others / option traders feel so far this year.

App: Toms Option Tools

Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.


Disclaimers

Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:  http://www.tomgentile.com/legal_disclaimers.html.

Sign Up Now for Free Education!