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Equity options liquidity soars alongside record index performance |
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The U.S. equity market experienced growth in the second quarter of 2024, with the S&P 500 and Nasdaq-100 reaching record highs. This was largely propelled by large caps especially in the technology sector, while small-cap stocks continued to underperform. Although market volatility continues to languish, Q2 saw certain Equity futures and option products achieve new records in the run up to the June expiry.
Equity Index options led with more liquidity and trading records. Year-to-date average daily volume (ADV) reached over 1.6M contracts, up 28% vs. Q2 2023. Traders continued to embrace the liquidity and flexibility of the suite.
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E-mini S&P 500 options traded over 1.5M contracts in Q2-2024 (+34% vs Q2-2023).
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E-mini Nasdaq-100 options also drove overall growth in the Equity options suite with ADV surpassing 80K contracts in Q2 (+27% vs. Q2-2023). The contract achieved a single-day volume record of 159,697 on April 19.
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Equity options YTD overnight ADV was a record 265K contracts.
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Options block trading gains momentum as liquidity deepens | |
Market participants continue to access deep pools of liquidity on larger sized trades using E-mini S&P 500 options blocks. Equity options blocks ADV traded 127K contracts in Q2 (+47% vs. Q2-2023). Nearly 65M E-mini S&P 500 options have traded via blocks since launch three years ago. E-mini Nasdaq-100 (NQ) options blocks have traded 230K+ contracts. |
E-mini S&P 500 Equal Weight futures gain traction, offering more diversification |
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Explore a new way to diversify your trading strategy with E-mini S&P 500 Equal Weight futures. Unlike the S&P 500 Index, which is weighted based on market capitalization, the S&P 500 Equal Weight Index allocates the same weight to all names in the S&P 500 Index. The contract serves as an alternative expression of the S&P 500 Index in taking risk exposure, while offering margin offsets with other Equity Index contracts. Since launch in February, 7.8K contracts have traded, and open interest (OI) increased to 2K+ contracts with further inflows. |
Real estate, utilities, and communications sectors continue to lead Sector futures growth |
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YTD volume averaged a record 20K contracts, up 9% vs. 2023, and average open interest reached record levels of 265K contracts (+11% vs 2023). Growth in Sector futures is driven by increased participation in the real estate, utilities and communications sectors.
The market has embraced the derived block functionality on Sector futures, which has facilitated greater intraday liquidity. Over 660K derived block contracts ($50B notional) have traded via this functionality since launch across the various sector products with single trades up to $1B notional being executed. |
AIR Total Return futures: Soaring volume and T+1 Transition | |
Adjusted Interest Rate (AIR) Total Return futures
across the S&P 500, Nasdaq-100 and Russell 2000 Indices have seen volume continuing to accelerate as traders embrace capital efficiencies. AIR Total Return futures YTD volume averaged 9.9K+ contracts, up +115% vs 2023. Nearing expiry, the suite traded a single-day volume record of 56,711 contracts on June 20. Year-to-date Globex ADV is 2.2K contracts (+528% vs 2023).
S&P 500 AIR Total Return futures highlights:
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Q2 2024 ADV reached a record 11.2K contracts (+169% vs Q2).
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Q2 2024 average OI reached 467K contracts (+41% vs Q2).
Transition to T+1 settlement: The U.S. securities markets transitioned to a shorter settlement cycle on May 28, 2024. AIR TRF contracts based on U.S. indices were impacted. The change to T+1 dictates the calculation of the accrued financing as well as the financing spread adjustment. Read the FAQ to learn more. |
Nikkei 225 futures liquidity strengthens | |
Japanese futures continue to see rising ADV averaging 40K contracts in 2024 (+3% vs. 2023) with average OI at 68K (+4% vs. 2023). CME Group is the only venue offering liquid USD Nikkei futures, with ADV up more than 9K (+29% vs. 2023).
Nikkei 225 futures vs. U.S. benchmark indices offer up to a 70% margin offset. Find more information about margin offsets. |
Navigating market volatility with equal-weight strategies |
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Experts from CME Group, S&P Dow Jones Indices and Invesco share insights on how to leverage equal-weighted versus cap-weighted strategies in portfolios, gain capital-efficient access to equal weight exposure and more. |
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 5 MIN READ |
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Equity options off to a flying start |
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Learn how E-mini options on futures for S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial indices can help investors navigate spikes in volatility and spreads between indices in our latest article. |
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5 MIN READ |
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Using sectors to identify opportunities beneath the benchmark index level |
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While the equity market continues to move upward, divergence is emerging across S&P sectors. Read about key factors that may influence sector performance and how S&P Select Sector futures can help mitigate risk and identify new opportunities. |
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5 MIN READ |
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Tap into small-cap stocks through the Russell 2000 Reconstitution |
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The annual Russell Reconstitution is usually one of the most heavily traded days of the year in the cash equities market, and investors have increasingly been using CME Group E-mini Russell 2000 futures to manage their risk or take advantage of possible opportunities in stock additions and deletions. |
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Data as of June 28, 2024, unless otherwise specified |
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Where risk meets opportunity. As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data. CME Group exchanges offer the widest range of global benchmark products across all major asset classes including interest rates, equity indexes, FX, energy, agricultural products and metals.
Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade.
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