Cboe reports Q3 options volume shifts toward index and ETF contracts

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Q3 options volume shifts

Highlights

Cboe reports Q3 average daily options volume at 70.6 million contracts, down 4% from Q2, with single-stock options slipping 8% to 32.7 million.
Zero-days-to-expiry options hit a record 24.2 million daily contracts in Q3, accounting for 36% of total options and 56% of index option volume.
Global Trading Hours for index options reach a September record of 288,000 contracts daily, and Cboe launches pre-market trading for 27 stocks and ETFs covering 53.4% of volume.

Quarterly trading mix shifts across options market

According to Cboe, Cboe Global Markets said market-wide average daily options volume stands at 70.6 million contracts in the third quarter, 4% below the record levels reached in the second quarter. Within that total, single-stock options post the steepest decline, down 8% to 32.7 million contracts a day, while index options average daily volume slips 3% to 6.1 million and ETF options rise 1% to 28.3 million.

The exchange operator also says retail order flow rebounds in September to all-time highs after slower trading in July and August. That follows an increase in June after the Pattern Day Trading rule is removed, pointing to renewed activity from individual investors late in the quarter.

Zero-days-to-expiry, or 0DTE, options continue to take a larger share of the market. Their average daily volume reaches a record 24.2 million contracts in the quarter, equal to about 36% of total options activity, with 0DTE index options averaging 3.4 million contracts a day, or 56% of index flow, and 0DTE ETF and single-stock options totaling nearly 20.8 million contracts daily, or 34% of that flow.

Extended-hours growth broadens industry capacity

Trading outside the regular session continues to expand, with overnight Global Trading Hours in SPX, XSP, VIX and RUT reaching a September record of nearly 288,000 contracts a day. That represents almost 3% of index options activity, underscoring growing demand for hedging and trading around the clock.

To support that expansion, Cboe has just launched pre-market trading from 7:30 a.m. to 9:25 a.m. ET for options on 27 highly liquid stocks and ETFs, which together account for 53.4% of market volume. FLEX Options volume also rises 6% to a record 2.33 million contracts per day, while total open interest finishes above 71 million contracts, nearly 11% of the market.

Elsewhere in the sector, two new exchanges launch near the end of the quarter, bringing the industry's total to 20 across six operators. The increase points to continued competition in U.S. options trading even as overall activity moderates from earlier record levels.

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