The Chicago Board Options Exchange (CBOE), the largest options exchange says that 2006 will go on the books as the third consecutive record breaking year, with more than 670 million contracts trading, an increase of 43 percent over 2005 total volume of 468 million contracts. Average daily volume has been 2.7 million contracts this year, up 88 percent from 2004, and more than double 2003’s volume of 1.13 million contracts per day.
CBOE’s success in increasing volume and garnering market share was reflected in record-setting seat prices throughout the year, with the new all-time high set on 6 December, at USD1,775,000, an increase of 100 percent from the USD875,000 price paid for a seat at the close of 2005.
Volume growth was fueled by strong increases across all product lines, with index options volume up 49 percent to over 285 million contracts, compared to 2005’s record setting 192.5 million contracts, and equity options volume up 43 percent to 391 million contracts, (compared to 2005’s record 275.6 million contracts). In particular, options on the S&P 500 Index (SPX) increased 43 percent to a record 103 million contracts, compared to 71.8 million traded in all of 2005. Volume in options on the iShares Russell 2000 Index Fund (IWM) surged a staggering 175 percent to 45 million contracts.
CBOE’s market lead over the six US options exchanges expanded this year to 33.4 percent, through continued product innovation and the launch of several successful new products. CBOE’s options on the CBOE Volatility Index (VIX), launched in February, will finish the year with average daily volume of more than 23,000 contracts. CBOE also introduced options on the CBOE Exchange Index (EXQ), a new benchmark measure of the publicly traded US exchanges.