A Pro’s Take on the Summer Options Trading Explosion

(Bloomberg) --

An explosion of trading in equity options among day-traders is suspected to have helped fuel the rally in U.S. stocks this summer. Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, joins this week’s episode of the “What Goes Up” podcast to explain what happened.

“The most notable change that we’ve seen this year is just the explosion in the retail trading flow concentrated in the front two weeks,” Murphy says. “We looked at what percentage of overall option trading volume was in the front two weeks before coronavirus, and before all the brokerage houses started to give out no-fee option trading. It was around 44%, and now it’s closer to 55%. That’s a huge difference.”

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