Cboe Reports July Trading Volumes, Index Options Shine

Karthik Subramanian

Cboe Global Markets released its trading volume data for July 2021, which shows strong volumes in most of the segments with the Index Options leading the way with the highest Average Daily Volume for the year in July.

Recently, Cboe had reported its Q2 results which showed that it had built up some very strong revenue when compared to the previous year due to higher volatility but with lower profitability. Going by the newly reported numbers for July, it could end up having a strong Q3 as well.

The average daily volume (ADV) for the Index Options for July 2021 came in at more than 1.9 million contracts which showed a mammoth 45% increase when compared to the same month last year and an 8% increase when compared to the previous month of June 2021. The massive increase, when compared to last year, is no big surprise as the world was in the middle of a pandemic around this time last year and hence the trading volumes were naturally low during the second and third quarters of last year. But what should be encouraging is the fact that the trading volumes are returning to normal as the pandemic slowly recedes across the world.

Another surprise to come through the report was the big drop in the ADV of Canadian equities which showed an 18% drop in July when compared to June 2021. The reasons for the same are not very clear but it could be that the investors and traders are looking out for other instruments and avenues for trading but this segment would be closely watched in the coming months to see whether this is a one-off or whether it is going to be a trend in the coming months.

Almost all segments have shown a big increase in their ADV when compared to the same month last year but for reasons mentioned above, the volumes from last year cannot be taken as a good comparison for judging the increase or the decrease in ADV. Cboe is expected to continue to show strong volumes when compared to last year but the advent of newer avenues for investment and trading is likely to be a slight dampener along with the increasing costs which cut down on the profits made. It is these numbers that are likely to be closely watched.

 

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