Dow Contracts Volumes Rising Dramatically
By Christopher Faille, Reporter
Monday, August 05, 2002
CHICAGO (HedgeWorld.com)—Great volatility in New York this summer has created record volume in Chicago.
In July the Chicago Board Options Exchange saw more than 1.4 million contracts trade on the Dow Jones Industrial Average, the DJX. This was an all-time record, surpassing the previous record month of April 2001, when 1.17 million contracts traded. This July’s figure was also 174% the volume on the same contract a year ago. Open interest in the DJX reached 898,895 at month’s end, an increase of 51% over a year before.
Likewise, trading in Diamonds options was unusually brisk in July, close to 615,000. The significant difference between DJX and DIA options, which are both indexes of the Dow Jones, is that DJX options are cash-settled; DIA options are physically settled. July 15 set a new single-day record for DIA volume, at 77,396 contracts. July 24 then busted that record, witnessing two-fifths again as much volume, or 125,320 contracts.
July also saw volume records in Standard & Poor’s 500 index options and Nasdaq-100 index tracking stock (QQQ), both also trading at the CBOE. SPX were the most actively traded index options at CBOE, with a total of more than 3.8 million contracts traded this July, surpassing the previous monthly record of 3.4 million established in March 1995. At the end of July 2002, open interest in SPX stood at 3.9 million, an increase of 33% over the year-earlier level.
Options on the Qs were 16% higher than a year before, establishing the new monthly volume record as 2.4 million contracts. The previous record from March 2001 was 2.2 million. Open interest in the Qs stood at 5.9 million at the end of the month.
In a related story, the Options Industry Council, Chicago, a non-profit association offering educational services for options brokers and investors, said Monday that July's equity options volume reached a new all-time high volume of more than 75 million contracts, surpassing the record set in January 2001, 73.3 million.
"July's volatile markets have been unprecedented," said the president of OIC, Paul Stevens. "Its record-breaking volume and equity open interest demonstrates that investors understand that options are an important and powerful tool during these times."
CFaille@HedgeWorld |
