JLN Options: Options Week in Review for December 30 – January 3

Jan 3, 2013

As predictions about the prospects for resolving the “fiscal cliff” situation swung back and forth over the Christmas and New Year holidays, the CBOE VIX index had its biggest two-day drop, falling 35.4% on Dec 31st, 2012 and January 2, 2013. Also, futures on the VIX set new trading volume records on both days. Trading volume on the CBOE Futures Exchange, where futures on the VIX are traded, reached an all time high during 2012.

ISE reported that it was the largest U.S. equity options exchange in December with 18.6% market share, but its average daily volume for 2012 decreased 18.1% over 2011. Options volumes in general were down slightly from 2011, with the OIC announcing a 2.43% decrease in Dec. 2012 volume compared with the previous December. Some U.S. analysts said they expected more volatility ahead in early 2013 as the country faces the chance of defaulting on its debt.

The Shanghai Futures Exchange, China’s only metals futures bourse, said it would develop options on futures and other derivative contracts for trading by foreign institutions in a bid to become a leading Asia-Pacific exchange in the next five years.

CBOE Holdings Inc. was identified as having a larger market cap than the smaller end of the S&P 500, Forbes reported.  — SR

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