January 2022 Options Newsletter

  • 25 Jan 2022
  • By CME Group

New year, new opportunities in options

2021 was an eventful year for the options on futures market. Overall average daily volume (ADV) increased by 6% year over year, reaching 3.3M contracts, and open interest (OI) averaged 54.6M daily contracts. 

We're excited to see what new trends and opportunities this year brings to the options market. One clear trend that has emerged in early 2022 trading is the growing interest in SOFR options, where OI has jumped from 3K to 77K contracts in just three weeks.

2021 in review: an options recap

  • Agriculture options ADV increased 10% YoY to an all-time record of 273K contracts, bolstered by record ADV in Corn options.
  • Interest Rate options ADV was up 9% YoY, with yield curve uncertainty and inflation concerns driving elevated activity in Treasury options.
  • Equity Index options ADV rose 6% YoY, with record ADV in both E-mini Nasdaq-100 options and E-mini Russell 2000 options.
  • Weekly expiring options saw outsized trading across asset classes as short-term volatility returned:
    • E-mini Nasdaq-100 weeklies +113%
    • Treasury weeklies +64%
    • WTI weeklies +47%
    • Ag weeklies +24%
    • CAD/USD weeklies +23%
    • Gold weeklies +17%

Most active options products by ADV - 2021

Product 2021 ADV ADV % YoY 2021 Avg. Daily OI
Eurodollars 1,059,318 0% 34,241,851
E-mini S&P 500 701,362 4% 3,386,276
10-Year Note  633,670 26% 3,069,592
5-Year Note  160,094 31% 1,070,583
T-Bond 129,682 3% 682,894
Corn 126,544 31% 1,717,252
WTI Crude Oil 123,093 3% 2,008,445
Natural Gas 94,157 -16% 2,468,674
Soybeans 73,154 9% 802,614
Gold 41,036 -31% 897,958

Growing pools of options liquidity

Product 2021 ADV ADV % YoY 2021 Avg. Daily OI
E-mini Nasdaq-100 27,706 74% 83,472
Short-Dated New Crop 9,080 159% 117,464
Gold weeklies 8,059 17% 22,587
E-mini Russell 2000 6,063 110% 44,799
CAD/USD 5,885 56% 131,550
Corn weeklies 5,611 23% 11,973
WTI weeklies 4,021 47% 9,176
Copper 2,971 76% 58,009
Micro E-mini Nasdaq-100 1,757 1057% 5,632
Micro E-mini S&P 500 1,556 355% 40,026

Source: CME Group

New education newsletter: Excell with Options

Sign up to receive actionable insights on trading options on futures, provided by Rich Excell, a veteran institutional trader who successfully managed multi-billion-dollar portfolios. This bi-weekly report will be provided every other Tuesday morning (CT). 

Case Study: Hedging Downside Risk in Corn Under Rising Input Costs with a Min-Max Contract

Concerned by volatility in the corn market? Learn how to use a min-max contract, or an options spread, to hedge downside risk in corn despite rising input costs. 

Options Observer: Trade ATM volatility in an accessible size with VOLQ futures

Nasdaq-100 Volatility Index futures are now available in a smaller contract size, 1/10 of the original size. Learn more about the VOLQ Index in this article, and how it derives its value from 32 different Nasdaq-100 Index options. 

CME Institute: QuikStrike Webinar

Join David Gibbs, Director of Education at CME Group, for the U.S. Treasury Futures: Risk Management webinar on February 9. The webinar will cover Treasury Analytics, the Open Interest Heat Map, and the Options Calculator ‒ all tools powered by QuikStrike. 

Top options tools of 2021

Check out the most frequently used QuikStrike options tools from 2021: 

  1. Open Interest Profile
  2. Open Interest Heatmap
  3. Options Calculator
  4. Vol2Vol Expected Range
  5. QuikVol Tool