As we head into Q3, we market the end of what has been a great first half of the year (H1). Overall performance of options has been strong in H1, with a record 5.23M average daily volume (ADV) and 649M total contracts traded.

Agricultural options and weekly options experienced a record quarter in Q2 as clients tapped into their trading flexibility: 

• Q2 Agricultural options trading sets a new record 384K ADV, 7% higher than the previous record in Q2 2019
• Q2 2023 Weekly options trading across all asset classes surges 12.57% compared to Q2 2022
• In the first half of 2023, Weekly options surged to 21.11% relative to the first half of 2022.

SOFR options ADV increased 935% to 1.8M contracts and WTI Crude Oil Weeklies (LO1-5) continue to grow, reaching a record quarter of 9.3K ADV.

This consistent strength in our options franchise may be attributed to several factors, such as volatility in the markets, new participants, and the demand for risk management tools. This growth illustrates the liquidity in our markets. CME Group has all your hedging and positioning needs covered, to help manage risk across all asset classes.

Market participants are increasingly turning to the expanded product choice and liquidity that CME Group's Equity Index options suite offers with Q2 2023 ADV of 1.24M contracts, up 4% vs. Q2 2022.

• E-mini S&P 500 (ES) options ADV reached 1.14M contracts, up 4% vs. Q2 2022. 
• During Asian and European trading hours, CME Group is the leading venue for risk transfer for S&P 500 options, with Q2 ADV reaching over 170K contracts.

Participation in ES options blocks continues to grow, allowing participants to execute large trades with more efficiency. 

• Nearly 35M ES options blocks have traded to date, with Q2 ADV at a record 87K contracts. 
• E-mini Nasdaq-100 options blocks traded over 39K contracts since their January 2022 launch.

Given geopolitical tensions, weather concerns, renewable fuel policy, and export demand trends, agriculture participants have used options in record fashion to help mitigate risk. There has been significant rise in the usage observed for Soybean Oil, Meal, and short-term options.

The Agricultural options complex set a record ADV of 384,099 contracts for the quarter and also achieved a single-day volume record by trading 976K contracts on June 16.

Four products set quarterly ADV records:

• Record Short-Term option ADV
  • Short-Dated New Crop options – 35,173
  • Weekly options -13,291
• Record Soybean Oil ADV – 22,878
• Record Soybean Meal ADV –18,572
• Record Calendar Spread option ADV – 5,405

Market participants are finding relationship-based trading helpful in option execution during the last quarter as volatility and price have made dramatic shifts during the second quarter.

Did you know that in 2022, over 70% of all options at CME Group were traded as spreads? Spreads, or strategies, are combinations of options and/or futures that are traded on CME Group’s central limit order book (CLOB). 

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Henry Hub options volume continues to grow year-over-year with open interest (OI) at 3.5M contracts, up 30% from 2022. Henry Hub options have 24-hour streaming screen markets with consistent liquidity through summer 2024, including Friday Weekly options for more precise hedging. 

Want to test your options strategy? Assess your strategy in a risk-free environment with the complimentary Strategy Simulator from QuikStrike. This tool allows traders to compare how an option would perform across different underlying price scenarios.

Activity in 2-Year Treasury options has made a comeback in 2023. As front-end curve risks have moved back in focus, 2-Year Treasury options are once again a great way for participants to manage uncertainty.

Gold Weekly options can offer multiple advantages for those who are looking for exposure to gold or simply need the support of a more precise hedge.