Option Volume By Exchange: Equity vs. Index

By Lawrence G. McMillan

Here’s a table that was printed on Bloomberg this week.  It shows the percentage of equity options and index options (and total) that each U. S. Option exchange trades.

First of all, I didn’t even realize that were 19 option exchanges!  For equity options, everybody seems to be getting a share, but in index options, it’s all Cboe – who has 98% of the volume.  That is enough to give the Cboe the overall lead with nearly 16%.  

The reason the CBOE has that much index percentage is that they have exclusive rights to the S&P products, and court challenges have not been able to dent that over the years.

As for the spreading out of equity trading, it has to do with payment for order flow.  As a customer, you don’t really care about this or see where the order is ultimately going, but your broker cares.